ITEM 10(g)
AMENDMENT
TO
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
GGP LIMITED PARTNERSHIP
THIS AMENDMENT (the "Amendment") is made and entered into on November
27, 2002, by and among the undersigned parties.
W I T N E S S E T H:
WHEREAS, a Delaware limited partnership known as GGP Limited
Partnership (the "Partnership") exists pursuant to that certain Second Amended
and Restated Agreement of Limited Partnership of GGP Limited Partnership dated
as of April 1, 1998, as amended (the "Second Restated Partnership Agreement"),
and the Delaware Revised Uniform Limited Partnership Act;
WHEREAS, General Growth Properties, Inc., a Delaware corporation, is
the general partner of the Partnership (the "General Partner");
WHEREAS, upon the closing of the transactions contemplated pursuant to
that certain Contribution and Sale Agreement dated as of October 18, 2002, among
the Partnership, JSG, LLC, a Delaware limited liability company (the "New
Limited Partner"), and the other parties thereto (the "Purchase Agreement"), the
New Limited Partner is to receive Series C Preferred Units (as defined below);
WHEREAS, the parties hereto, being the sole general partner of the
Partnership, the holders of a Majority-in-Interest of the Common Units and the
New Limited Partner, desire to amend the Second Restated Partnership Agreement
to effect the creation and issuance of the Series C Preferred Units and to
reflect certain other understandings among them as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby agree
as follows:
1. CAPITALIZED TERMS. Capitalized terms used but not defined herein
(including without limitation in attached Schedule A) shall have the definitions
assigned to such terms in the Second Restated Partnership Agreement, as amended
hereby.
2. ESTABLISHMENT AND ISSUANCE OF SERIES C PREFERRED UNITS. A new series
of Preferred Units designated as the "7% Series C Cumulative Convertible
Preferred Units" (the "Series C Preferred Units") is hereby established and
shall have such rights, preferences, limitations and qualifications as are
described on Schedule A, attached hereto and by this reference made a part
hereof (in addition to the rights, preferences, limitations and qualifications
contained in the Second Restated Partnership Agreement to the extent
applicable). Pursuant to the Purchase Agreement, the Partnership hereby issues
to the New Limited Partner the number of
Series C Preferred Units set forth opposite its name on Exhibit A, attached
hereto and by this reference made a part hereof. The Capital Contribution made
by the New Limited Partner shall be deemed to be $50 per Series C Preferred
Unit. The New Limited Partner is hereby admitted as a Limited Partner in respect
of the Series C Preferred Units issued to it, and the New Limited Partner hereby
agrees to be bound by the provisions of the Second Restated Partnership
Agreement, as the same is amended hereby and as the same may be amended from
time to time, with respect to such Series C Preferred Units (including without
limitation the provisions of Sections 8.2, 8.4, 9.1, 9.2 and 9.3 thereof).
3. NEW EXHIBIT A. Exhibit A to the Second Restated Partnership
Agreement, identifying the Partners, the number and class or series of Units
owned by them and their respective Percentage Interests, if any, is hereby
deleted in its entirety and the Exhibit A in the form attached hereto is hereby
inserted in its place and stead.
4. OTHER PROVISIONS UNAFFECTED. Except as expressly amended hereby, the
Second Restated Partnership Agreement shall remain in full force and effect in
accordance with its terms.
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IN WITNESS WHEREOF, the undersigned have executed this Amendment on the
day and year first above written.
GENERAL PARTNER:
GENERAL GROWTH PROPERTIES, INC.,
a Delaware corporation
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------------------
Xxxxxxx Xxxxxxxx
Executive Vice President
LIMITED PARTNERS:
M.B. CAPITAL PARTNERS III, a South
Dakota general partnership
By: GENERAL TRUST COMPANY, not
individually but solely as Trustee
of Xxxxxx Investment Trust G, a partner
By: /s/ Xxxxxxxx X. Xxxxxxxxx
---------------------------------------
Xxxxxxxx X. Xxxxxxxxx, President
NEW LIMITED PARTNER:
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JSG, LLC, a Delaware limited
liability company
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Xxxxxx X. Xxxxxxx, Managing Member
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EXHIBIT A
PARTNERS
SEE ATTACHED
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SCHEDULE A
1. DEFINITIONS. As used in this Schedule, the following terms shall
have the meanings set forth below, unless the context otherwise requires:
"Common Unit Value" shall mean, with respect to any trading day, the
trading price of a share of Common Stock (calculated based on the average of the
intra-day high and low and subject to adjustment in the event that the exchange
ratio between Common Units and shares of Common Stock is not one-to-one or other
adjustments if the kind or amount of securities into which Common Units can be
converted or exchanged (as provided in the Redemption Rights Agreement (Common
Units), dated the date hereof) changes after the date hereof).
"Distribution Payment Date" shall mean, with respect to any
Distribution Period, the payment date for the distribution declared by the
General Partner on its Common Units for such Distribution Period or, if no such
distribution payment date is established, the last business day of the first
full month following such Distribution Period.
"Distribution Period" shall mean the quarterly period that is then the
distribution period with respect to the Common Units or, if no such distribution
period is established, the calendar quarter shall be the Distribution Period;
provided that (a) the initial Distribution Period shall commence on date hereof
and end on and include December 31, 2002 and (b) the Distribution Period in
which the final liquidation payment is made pursuant to Section 7.2 of the
Second Restated Partnership Agreement shall commence on the first day following
the immediately preceding Distribution Period and end on the date of such final
liquidation payment.
"Fair Market Value" shall mean the average of the daily Closing Price
during the ten consecutive Trading Days ending on the earlier of (i) the
business day immediately preceding the day in question with respect to the
issuance or distribution requiring such computation (subject to appropriate
adjustment in the event that the exchange ratio between Common Units and shares
of Common Stock is not one-to-one) and (ii) the day before the "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 shares of Common Stock 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 Closing Price.
"Relevant Distribution Periods" shall mean (i) each of the three (3)
consecutive Distribution Periods the last of which ends during the 90-day period
referred to in the last paragraph of Section 7(b) and (ii) the next immediately
following Distribution Period after the third Distribution Period described in
clause (i) above.
"Series H Preferred Stock Designation" shall mean that certain
Certificate of Designations, Preferences and Rights of the Series H Preferred
Stock.
"Series H Preferred Stock" shall mean the 7% Cumulative Convertible
Preferred Stock, Series H, of the General Partner.
"Twelfth Anniversary Date" shall mean the twelfth anniversary of the
date hereof.
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2. DESIGNATION AND NUMBER; ETC. The Series C Preferred Units have been
established and shall have such rights, preferences, limitations and
qualifications as are described herein (in addition to the rights, preferences,
limitations and qualifications contained in the Second Restated Partnership
Agreement to the extent applicable). The authorized number of Series C Preferred
Units shall be 822,626.0284. Notwithstanding anything to the contrary contained
herein, in the event of a conflict between the provisions of this Schedule A and
any other provision of the Second Restated Partnership Agreement, the provisions
of this Schedule A shall control. The holders of Series C Preferred Units are
entitled to certain redemption rights pursuant to that certain Redemption Rights
Agreement (Series C Preferred Units) and that certain Redemption Rights
Agreement (Common Units), each dated the date hereof and each among the
Partnership, the General Partner and the New Limited Partner, which redemption
rights may be exercised only on or after the first anniversary of the date
hereof.
3. RANK. The Series C Preferred Units shall, with respect to the
payment of distributions and the distribution of amounts upon voluntary or
involuntary liquidation, dissolution or winding-up of the Partnership, rank as
follows:
(a) senior to all classes or series of Common Units and to all Units
the terms of which provide that such Units shall rank junior to the Series C
Preferred Units;
(b) on a parity with the Series A Preferred Units, the Series B
Preferred Units and each other series of Preferred Units issued by the
Partnership which does not provide by its express terms that it ranks junior or
senior in right of payment to the Series C Preferred Units with respect to
payment of distributions or amounts upon liquidation, dissolution or winding-up;
and
(c) junior to any class or series of Preferred Units issued by the
Partnership that ranks senior to the Series C Preferred Units and has been
approved in accordance with Section 4 of this Schedule A.
4. VOTING.
(a) Holders of Series C Preferred Units shall not have any voting
rights, except as required by applicable law and as described below in this
Section 4.
(b) So long as any Series C Preferred Units remain outstanding, the
Partnership shall not, without the affirmative vote or consent of the holders of
at least a majority of the Series C Preferred Units outstanding at the time,
given in person or by proxy, either in writing or at a meeting (such series
voting separately as a class), (i) authorize, create, issue or increase the
authorized or issued amount of, any class or series of partnership interests in
the Partnership ranking senior to the Series C Preferred Units with respect to
the payment of distributions or the distribution of assets upon voluntary or
involuntary liquidation, dissolution or winding-up of the Partnership or
reclassify any Common Units into such partnership interests, or create,
authorize or issue any obligation or security convertible or exchangeable into
or evidencing the right to purchase any such partnership interests; or (ii)
amend, alter or repeal the provisions of the Partnership Agreement, whether by
merger or consolidation or otherwise (an "Event"), so as to negate the
provisions of clause (i) or (ii) of this paragraph or so as to materially and
adversely affect any special right, preference, privilege or voting power of the
Series C Preferred Units or
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the holders thereof. Notwithstanding anything to the contrary contained herein,
each of the following shall be deemed not to (i) materially and adversely affect
any such special right, preference, privilege or voting power or (ii) otherwise
require the vote or consent of the holders of the Series C Preferred Units: (X)
the occurrence of any merger, consolidation, entity conversion, unit exchange,
recapitalization of the Common Units or other business combination or
reorganization, so long as either (1) the Partnership is the surviving entity
and the Series C Preferred Units remain outstanding with the terms thereof
materially unchanged or (2) if the Partnership is not the surviving entity in
such transaction, interests in an entity having substantially the same rights
and terms with respect to rights to distributions, voting, redemption and
conversion as the Series C Preferred Units are exchanged or substituted for the
Series C Preferred Units without any income, gain, or loss expected to be
recognized by the holder upon the exchange or substitution for federal income
tax purposes (and with the terms of the Common Units or such other securities
for which the Series C Preferred Units (or the substitute or exchanged security
therefor) are convertible or redeemable materially the same with respect to
rights to distributions, voting, and redemption), (Y) any increase in the amount
of the authorized Preferred Units or Common Units or the creation or issuance of
any other series or class of Preferred Units or Common Units or any increase in
the amount of Common Units or any other series of Preferred Units, in each case
so long as such Units rank on a parity with or junior to the Series C Preferred
Units with respect to payment of distributions and the distribution of assets
upon voluntary or involuntary liquidation, dissolution or winding-up of the
Partnership and (Z) the dissolution, liquidation and/or winding up of the
Partnership.
The foregoing voting provisions shall not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding Series C Preferred Units shall have been
converted or redeemed.
For purposes of the foregoing provisions of this Section 4, each Series
C Preferred Unit shall have one (1) vote.
In addition, the General Partner shall not take any of the actions that
are described in Section IV(b) of the Series H Preferred Stock Designation and
that require the consent of the holders of the issued and outstanding shares of
Series H Preferred Stock without the affirmative vote or consent (given in
person or by proxy, either in writing or at a meeting) of holders of issued and
outstanding Series C Preferred Units and shares of Series H Preferred Stock
having a base liquidation preference of more than fifty percent (50%) of the
aggregate base liquidation preferences of the issued and outstanding Series C
Preferred Units and shares of Series H Preferred Stock (with such holders voting
together as a single class).
Except as otherwise required by applicable law or as set forth herein,
the Series C Preferred Units shall not have any voting rights or powers and the
consent of the holders thereof shall not be required for the taking of any
action.
5. DISTRIBUTIONS.
(a) With respect to each Distribution Period and subject to the rights
of the holders of Preferred Units ranking senior to or on parity with the Series
C Preferred Units, the holders of Series C Preferred Units shall be entitled to
receive, when, as and if declared by the General
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Partner, out of assets of the Partnership legally available for the payment of
distributions, quarterly cumulative cash distributions in an amount per Series C
Preferred Unit equal to the greater of (i) $0.8750 (the "Base Quarterly
Distribution") and (ii) the amount of the regular quarterly cash distribution
for such Distribution Period upon the number of Common Units (or portion
thereof) into which such Series C Preferred Unit is then convertible in
accordance with Section 7 of this Schedule A. Notwithstanding anything to the
contrary contained herein, the amount of distributions described under each of
clause (i) and (ii) of this paragraph for the initial Distribution Period, or
any other period shorter than a full Distribution Period, shall be prorated and
computed on the basis of twelve 30-day months and a 360-day year. Such
distributions shall, with respect to each Series C Preferred Unit, accrue from
its issue date, whether or not in, or with respect to, any Distribution Period
or Periods (A) the distributions described above are declared, (B) the
Partnership is contractually prohibited from paying such distributions or (C)
there shall be assets of the Partnership legally available for the payment of
such distributions. The distributions upon the Series C Preferred Units for each
Distribution Period shall, if and to the extent declared or authorized by the
General Partner on behalf of the Partnership, be paid in arrears (without
interest or other amount) on the Distribution Payment Date with respect thereto,
and, if not paid on such date, shall accumulate, whether or not in, or with
respect to, any Distribution Period or Periods (X) the distributions are
declared, (Y) the Partnership is contractually prohibited from paying such
distributions or (Z) there shall be assets of the Partnership legally available
for the payment of such distributions. The record date for distributions upon
the Series C Preferred Units for any Distribution Period shall be the same as
the record date for the distributions upon the Common Units for such
Distribution Period (or, if no such record date is set for the Common Units, the
fifteenth day of the calendar month in which the applicable Distribution Payment
Date falls if prior to such Distribution Payment Date; otherwise, the fifteenth
day of the immediately preceding calendar month). Accumulated and unpaid
distributions for any past Distribution Periods may be declared and paid at any
time, without reference to any Distribution Payment Date, to holders of record
on such date, not exceeding 45 days preceding the payment date thereof, as may
be fixed by the General Partner. Any distribution payment made upon the Series C
Preferred Units shall first be credited against the earliest accrued but unpaid
distributions due with respect to such Units which remains payable. No interest,
or sum of money in lieu of interest, shall be owing or payable in respect of any
distribution payment or payments on the Series C Preferred Units, whether or not
in arrears.
(b) No distribution on the Series C 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 bona fide agreement of the
Partnership, including any agreement relating to bona fide 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 (and such failure to pay distributions on the
Series C Preferred Units shall prohibit other distributions by the Partnership
as described in Sections 5(c) or (d) of this Schedule A). Notwithstanding the
foregoing, distributions on the Series C Preferred Units shall accumulate
whether or not any of the foregoing restrictions exist.
(c) Except as provided in Section 5(d) of this Schedule A, so long as
any Series C Preferred Units are outstanding, (i) no distributions (other than
in Common Units or other Units ranking junior to the Series C Preferred Units as
to payment of distributions and amounts upon
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liquidation, dissolution or winding-up of the Partnership) shall be declared or
paid or set apart for payment upon the Common Units or any other class or series
of partnership interests in the Partnership or Units ranking, as to payment of
distributions or amounts distributable upon liquidation, dissolution or
winding-up of the Partnership, on a parity with or junior to the Series C
Preferred Units, for any period and (ii) no Common Units or other Units ranking
junior to or on a parity with the Series C Preferred Units as to payment of
distributions or amounts upon liquidation, dissolution or winding-up of the
Partnership shall be redeemed, purchased or otherwise acquired for any
consideration (or any monies be paid to or made available for a sinking fund for
the redemption of any such Units) by the Partnership (except by conversion into
or exchange for other Units ranking junior to the Series C Preferred Units as to
payment of distributions and amounts upon liquidation, dissolution or winding-up
of the Partnership or by redemptions pursuant to Rights Agreements) unless, in
the case of either clause (i) or (ii), 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 C Preferred Units
for all Distribution Periods ending on or prior to the distribution payment date
for the Common Units or such other class or series of Unit or the date of such
redemption, purchase or other acquisition.
(d) When distributions are not paid in full (or a sum sufficient for
such full payment is not set apart for such payment) upon the Series C Preferred
Units and any other partnership interests in the Partnership or Units ranking on
a parity as to payment of distributions with the Series C Preferred Units, all
distributions declared upon the Series C Preferred Units and any other
partnership interests in the Partnership or Units ranking on a parity as to
payment of distributions with the Series C Preferred Units shall be declared pro
rata so that the amount of distributions declared per Unit of Series C Preferred
Units and such other partnership interests in the Partnership or Units shall in
all cases bear to each other the same ratio that accrued and unpaid
distributions per Unit on the Series C Preferred Units and such other
partnership interests in the Partnership or Units (which shall not include any
accumulation in respect of unpaid distributions for prior distribution periods
if such Units do not have cumulative distributions) bear to each other.
(e) Holders of Series C Preferred Units shall not be entitled to any
distributions, whether payable in cash, property or Units, in excess of the
cumulative distributions described in Section 5(a) above.
(f) Distributions with respect to the Series C Preferred Units are
intended to qualify as permitted distributions of cash that are not treated as a
disguised sale within the meaning of Treasury Regulation Section 1.707-4 and the
provisions of this Schedule A shall be construed and applied consistently with
such Treasury Regulations.
6. LIQUIDATION PREFERENCE.
(a) In the event of any voluntary or involuntary liquidation,
dissolution 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 Common Units or any other partnership interests
in the Partnership or Units ranking junior to the Series C Preferred Units as to
the distribution of assets upon the liquidation, dissolution or winding-up of
the Partnership, the
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holders of the Series C Preferred Units shall, with respect to each such Unit,
be entitled to receive, out of the assets of the Partnership available for
distribution to Partners after payment or provision for payment of all debts and
other liabilities of the Partnership and subject to the rights of the holders of
any series of Preferred Units ranking senior to or on parity with the Series C
Preferred Units with respect to payment of amounts upon liquidation, dissolution
or winding-up of the Partnership, an amount equal to the greater of (i) $50,
plus an amount equal to all distributions (whether or not earned or declared)
accrued and unpaid thereon to the date of final distribution (including all
accumulated and unpaid distributions) and (ii) the amount that a holder of such
Series C Preferred Unit would have received upon final distribution in respect
of the number of Common Units into which such Series C Preferred Unit (including
all accumulated and unpaid distributions (whether or not earned or declared)
with respect thereto) was convertible immediately prior to such date of final
distribution. If, upon any such voluntary or involuntary liquidation,
dissolution or winding-up of the Partnership, the assets of the Partnership, or
proceeds thereof, distributable among the holders of the Series C Preferred
Units are insufficient to pay in full the preferential amount aforesaid on the
Series C Preferred Units and liquidating payments on any other Units or
partnership interests in the Partnership of any class or series ranking, as to
payment of distributions and amounts upon the liquidation, dissolution or
winding-up of the Partnership, on a parity with the Series C Preferred Units,
then such assets, or the proceeds thereof, shall be distributed among the
holders of Series C Preferred Units and any such other Units or partnership
interests in the Partnership ratably in accordance with the respective amounts
that would be payable on such Series C Preferred Units and such other Units or
partnership interests in the Partnership if all amounts payable thereon were
paid in full. For the purposes of this Section 6, none of (i) a consolidation or
merger of the Partnership with or into another entity, (ii) a merger of another
entity with or into the Partnership or (iii) a sale, lease or conveyance of all
or substantially all of the Partnership's assets, properties or business shall
be deemed to be a liquidation, dissolution or winding-up of the Partnership.
(b) Written notice of such 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 first class mail, postage pre-paid, not less than 30 nor more than
60 days prior to the payment date stated therein, to each record holder of the
Series C Preferred Units at the respective addresses of such holders as the same
shall appear on the transfer records of the Partnership.
(c) After payment of the full amount of liquidating distributions to
which they are entitled as provided in Section 6(a) of this Schedule A, the
holders of Series C Preferred Units shall have no right or claim to any of the
remaining assets of the Partnership.
7. CONVERSION. Holders of Series C Preferred Units shall have the right
to convert all or a portion of such Units into Common Units, as follows:
(a) A holder of Series C Preferred Units shall have the right, at such
holder's option, at any time, to convert any whole number of Series C Preferred
Units into fully paid and non-assessable Common Units; provided, however, that
the conversion right may not be exercised at any one time by a holder of Series
C Preferred Units with respect to less than 1,000 Series C Preferred Units (or
all the Series C Preferred Units then owned by such holder if such holder owns
less than 1,000 Series C Preferred Units). Each Series C Preferred Unit shall be
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convertible into the number of Common Units determined by dividing (i) the $50
base liquidation preference per Series C Preferred Unit, plus an amount equal to
all accumulated and unpaid distributions (whether or not earned or declared)
with respect thereto by (ii) a conversion price of $61.6575 per Common Unit
(equivalent to an initial conversion rate of 0.8109 Common Units for each Series
C Preferred Unit), subject to adjustment as described in Section 7(c) hereof
(the "Conversion Price").
(b) To exercise the conversion right, the holder of each Series C
Preferred Unit to be converted shall execute and deliver to the General Partner,
at the principal office of the Partnership, a written notice (the "Conversion
Notice") indicating that the holder thereof elects to convert such Series C
Preferred Unit and containing representations and warranties of such holder that
(i) such holder has good and marketable title to such Series C Preferred Unit,
free and clear of all liens, claims and encumbrances, (ii) such holder has such
knowledge and experience in financial and business matters such that such holder
is capable of evaluating the merits and risks of receiving and owning the Common
Units that may be issued to it in exchange for such Series C Preferred Unit,
(iii) such holder is able to bear the economic risk of such ownership and (iv)
such Common Units to be acquired by such holder pursuant to this Agreement would
be acquired by such holder for its own account, for investment purposes only and
not with a view to, and with no present intention of, selling or distributing
the same in violation of federal or state securities laws. Unless the Units
issuable on conversion are to be issued in the same name as the name in which
such Series C Preferred Unit is registered, each Series C Preferred Unit
surrendered for conversion shall be accompanied by instruments of transfer, in
form reasonably satisfactory to the Partnership, duly executed by the holder or
such holder's duly authorized attorney and an amount sufficient to pay any
transfer or similar tax (or evidence reasonably satisfactory to the Partnership
demonstrating that such taxes have been paid).
As promptly as practicable after delivery of the Conversion Notice as
aforesaid, the Partnership shall amend the Partnership Agreement to reflect the
conversion and the issuance of Common Units issuable upon the conversion of such
Series C Preferred Units in accordance with the provisions of this Section 7. In
addition, the Partnership shall deliver to the holder at its address as
reflected on the records of the Partnership, a copy of such amendment.
A holder of Series C Preferred Units at the close of business on the
record date for any Distribution Period shall be entitled to receive the
distribution payable on such Units on the corresponding Distribution Payment
Date notwithstanding the conversion of such Series C Preferred Units following
such record date and prior to such Distribution Payment Date and shall have no
right to receive any distribution for such Distribution Period in respect of the
Common Units into which such Series C Preferred Units were converted. Except as
provided herein, the Partnership shall make no payment or allowance for unpaid
distributions, whether or not in arrears, on converted Series C Preferred Units
or for distributions on the Common Units that are issued upon such conversion.
In the event that a holder of Series C Preferred Units converts its Series C
Preferred Units into Common Units on or prior to the record date for the initial
Distribution Period, the distribution for such Distribution Period in respect of
such Common Units shall be prorated and computed on the basis of twelve 30-day
months and a 360-day year.
Each conversion shall be deemed to have been effected immediately prior
to the close of business on the date on which the Conversion Notice is received
by the Partnership as aforesaid,
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and the person or persons in whose name or names any Common Units shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record of such Units at such time on such date, and such conversion
shall be at the Conversion Price in effect at such time and on such date unless
the transfer books of the Partnership shall be closed on that date, in which
event such person or persons shall be deemed to have become such holder or
holders of record at the close of business on the next succeeding day on which
such transfer books are open, but such conversion shall be at the Conversion
Price in effect on the date on which such Units have been surrendered and such
notice received by the Partnership.
Notwithstanding anything to the contrary contained herein, all holders
of Preferred Units shall be deemed to have delivered a Conversion Notice (and
therefore exercised their conversion rights effective as of the time specified
in the next sentence) as to all Series C Preferred Units if (a) with respect to
any period of 90 consecutive calendar days following the Twelfth Anniversary
Date, the Common Unit Value exceeds on each trading day during such 90-day
period the Conversion Price then in effect and (b) the amount of the
distribution (as calculated in accordance with Section 5(a)(ii) of this Schedule
A) for each of the four (4) Relevant Distribution Periods upon the number of
Common Units (or portion thereof) into which a Series C Preferred Unit is then
convertible in accordance with this Section 7 exceeds the Base Quarterly
Distribution. The forced conversion referred to in this paragraph shall be
effective at the close of business on the Distribution Payment Date for the last
Relevant Distribution Period.
(c) The Conversion Price shall be adjusted from time to time as
follows:
(i) If the Partnership shall, after the date on which the
Series C Preferred Units are first issued (the "Issue Date"), (A) pay
or make a distribution to holders of its partnership interests or Units
in Common Units, (B) subdivide its outstanding Common Units into a
greater number of Units or distribute Common Units to the holders
thereof, (C) combine its outstanding Common Units into a smaller number
of Units, or (D) issue any partnership interests or 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 holders entitled to receive such distribution or at
the opening of business on the 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 C
Preferred Unit thereafter surrendered for conversion shall be entitled
to receive the number of Common Units or other partnership interests or
securities that such holder would have owned or have been entitled to
receive after the happening of any of the events described above had
such Series C Preferred Unit been converted immediately prior to the
close of business on the record date in the case of a distribution or
the effective date in the case of a subdivision, combination or
reclassification. An adjustment made pursuant to this subsection (i)
shall become effective immediately after the opening of business on the
day next following the record date (except as provided in subsection
(g) below) in the case of a distribution and shall become effective
immediately after the opening of business on the 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 to subscribe for or purchase
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Common Units (or securities convertible into or exchangeable for Common
Units) at a price per Unit less than the Fair Market Value per Common
Unit on the record date for the determination of holders of Common
Units entitled to receive such rights, options or warrants, then the
Conversion Price in effect at the opening of business on the day next
following such record date shall be adjusted to equal the price
determined by multiplying (I) the Conversion Price in effect
immediately prior to the opening of business on the day following the
date fixed for such determination by (II) a fraction, the numerator of
which shall be the sum of (A) the number of Common Units outstanding at
the close of business on the date fixed for such determination and (B)
the number of Common Units that the aggregate proceeds to the
Partnership from the exercise of such rights, options or warrants for
Common Units would purchase at such Fair Market Value, and the
denominator of which shall be the sum of (A) the number of Common Units
outstanding at the close of business on the date fixed for such
determination and (B) 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 subsection (g) 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 the Fair Market Value, 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
in good faith by the Board of the General Partner.
(iii) If the Partnership shall distribute after the Issue Date
to all holders of Common Units any other securities or evidences of its
indebtedness or assets (excluding those rights, options and warrants
referred to in and treated under subsection (ii) above, and excluding
distributions paid exclusively in cash) (any of the foregoing being
hereinafter in this subsection (iii) called the "Securities"), then in
each case the Conversion Price shall be adjusted so that it shall equal
the price determined by multiplying (I) the Conversion Price in effect
immediately prior to the close of business on the date fixed for the
determination of holders of Common Units entitled to receive such
distribution by (II) 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 in good faith by the
Board of the General Partner) of the portion of the Securities so
distributed 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 subsection (g) below) the record date for the determination
of holders of Common Units entitled to receive such distribution. For
the purposes of this subsection (iii), a distribution in the form of a
Security, which is distributed not only to the holders of the Common
Units on the date fixed for the determination of holders of Common
Units entitled to such distribution of such Security, but also is
distributed with each Common Unit delivered to a person converting a
Series C Preferred Unit after such determination date (together with
distributions thereon paid to the holders of Common Units prior
thereto), shall not require an adjustment of the Conversion Price
pursuant to this subsection (iii); provided that on the date, if any,
on which a person converting a Series C Preferred Unit would no longer
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be entitled to receive such Security with a Common Unit, a distribution
of such Securities shall be deemed to have occurred, and the Conversion
Price shall be adjusted as provided in this subsection (iii) (and such
day shall be deemed to be "the date fixed for the determination of the
holders of Common Units entitled to receive such distribution" and "the
record date" within the meaning of the two preceding sentences).
(iv) Notwithstanding the foregoing, no adjustment shall be
made pursuant to the preceding clauses (ii) and (iii) that would result
in an increase in the Conversion Price. 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 this subsection (iv)
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 accordance with the
provisions of this Section 7 (other than this subsection (iv)) 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 7, the Partnership
shall not be required to make any adjustment to the Conversion Price
for the issuance of (i) 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 or (ii) any options, rights or Common
Units pursuant to or on account of any unit or stock option, unit or
stock purchase or any unit or stock-based compensation plan maintained
by the Partnership or the General Partner. All calculations under this
Section 7 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.
(d) If the Partnership shall be a party to any transaction (including,
without limitation, a merger, consolidation, entity conversion, unit exchange,
self tender offer for all or substantially all of the Common Units, sale of all
or substantially all of the Partnership's assets or recapitalization of the
Common Units or other business combination or reorganization and excluding any
transaction as to which subsection (c)(i) of this Section 7 applies) (each of
the foregoing being referred to herein as a "Transaction"), in each case as a
result of which Common Units shall be exchanged for or converted into the right,
or the holders of such units shall otherwise be entitled, to receive,
partnership interests, shares, stock, securities or other property (including
cash or any combination thereof), each Series C Preferred Unit which is not
converted into the right to receive partnership interests, shares, stock,
securities or other property in connection with such Transaction (and thus
remains outstanding) shall thereafter be convertible into the kind and amount of
partnership interests, shares, stock, 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 C
Preferred Unit (including all distributions (whether or not earned or declared)
accumulated and unpaid thereon) was convertible immediately prior to such
Transaction, assuming such holder of Common Units 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 (a "Constituent Person"), or an affiliate of a Constituent Person. In the
event that holders of Common Units have the opportunity to elect the form or
type of consideration to be received upon consummation of the Transaction, prior
to such transaction the General Partner shall give
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prompt written notice to each Series C Preferred Unit holder of such election,
and each Series C Preferred Unit holder shall also have the right to elect, by
written notice to the General Partner, the form or type of consideration to be
received upon conversion of each Series C Preferred Unit held by such holder
following consummation of such Transaction. If a holder of Series C Preferred
Units fails to make such an election, such holder (and any of its transferees)
shall receive upon conversion of each Series C Preferred Unit held by such
holder (or by any of its transferees) the same consideration that a holder of
that number of Common Units into which one Series C Preferred Unit was
convertible immediately prior to such Transaction would receive if such Common
Unit holder failed to make such an election. The Partnership shall not be a
party to any Transaction unless the terms of such Transaction are consistent
with the provisions of this subsection (d), 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 C Preferred Units that will contain
provisions enabling the holders of Series C 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 (with the holder having the option to elect the type of
consideration if a choice is offered in the Transaction as specified above). The
provisions of this subsection (d) shall similarly apply to successive
Transactions.
(e) If:
(i) the Partnership shall declare a distribution on the Common
Units (other than a cash distribution) or there shall be a
reclassification, subdivision or combination of Common Units; or
(ii) the Partnership shall authorize the granting to the
holders of the 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
or any consolidation or merger to which the Partnership is a party and
for which approval of any partners of the Partnership is required,
involving the conversion or exchange of Common Units into securities or
other property, or a unit exchange involving the conversion or exchange
of Common Units into securities or other property, a self tender offer
by the Partnership for all or substantially all of the 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 Partnership shall cause to be mailed to the holders of the Series C
Preferred Units at their addresses as shown on the records of the Partnership,
as promptly as possible a notice stating (A) the date on which a record is to be
taken for the purpose of such distribution 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 of rights, options or warrants are
to be determined or (B) the date on which such reclassification, subdivision,
combination, consolidation, merger, sale, transfer, liquidation, dissolution or
winding-up is expected to
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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 7.
(f) Whenever the Conversion Price is adjusted as herein provided, the
Partnership shall prepare a notice of such adjustment of the Conversion Price
setting forth the adjusted Conversion Price and the effective date such
adjustment becomes effective and shall mail such notice of such adjustment of
the Conversion Price to the holder of each Series C Preferred Unit at such
holder's last address as shown on the records of the Partnership.
(g) In any case in which subsection (c) of this Section 7 provides that
an adjustment shall become effective on the date next following the record date
for an event, the Partnership may defer until the occurrence of such event
issuing to the holder of any Series C 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.
(h) For purposes of this Section 7, the number of Common Units at any
time outstanding shall not include any Common Units then owned or held by or for
the account of the Partnership. The Partnership shall not make any distribution
on Common Units held in the treasury of the Partnership.
(i) If any action or transaction would require adjustment of the
Conversion Price pursuant to more than one subsection of this Section 7, 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 7, that in the reasonable
judgment of the Partnership would materially affect the conversion rights of the
holders of the Series C Preferred Units, the Conversion Price for the Series C
Preferred Units may be adjusted, to the extent permitted by law, in such manner,
if any, and at such time, as the General Partner, determines to be equitable in
the circumstances.
(k) The Partnership covenants that Common Units issued upon conversion
of the Series C Preferred Units shall be validly issued, fully paid and
non-assessable and the holder thereof shall be entitled to rights of a holder of
Common Units specified in the Partnership Agreement. Prior to the delivery of
any securities that the Partnership shall be obligated to deliver upon
conversion of the Series C Preferred Units, the Partnership shall endeavor to
comply with all federal and state laws and regulations in respect thereof.
(l) 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 C Preferred
Units pursuant hereto; provided, however, that the Company shall not be required
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 C Preferred Units to be converted,
and no such issue or
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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.
(m) Notwithstanding anything to the contrary contained herein, the
adjustment provisions contained in this Section 7 shall be applied so that there
is no duplication of adjustments made pursuant to any other document.
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