FOURTH AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
REGENCY CENTERS, L.P.
(formerly known as Regency Retail Partnership, L.P.)
TABLE OF CONTENTS
Article 1
Defined Terms
Article 2
Organizational Matters
Section 2.1 Organization; Application of Act..........................16
Section 2.2 Name......................................................16
Section 2.3 Registered Office and Agent; Principal Office.............16
Section 2.4 Term......................................................16
Article 3
Purpose
Section 3.1 Purpose and Business......................................16
Section 3.2 Powers....................................................17
Article 4
Capital Contributions; Issuance Of Units;
Capital Accounts
Section 4.1 Capital Contributions of the Partners.....................17
Section 4.2 Issuances of Additional Partnership Interests.............19
Section 4.3 No Preemptive Rights......................................21
Section 4.4 Capital Accounts of the Partners..........................21
Section 4.5 Issuance of Series A Preferred Units......................22
Article 5
Distributions
Section 5.1 Requirement and Characterization of Distributions.........34
Section 5.2 Amounts Withheld..........................................35
Section 5.3 Withholding...............................................35
Section 5.4 Distributions Upon Liquidation............................37
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Article 6
Allocations
Section 6.1 Allocations of Net Income and Net Loss....................37
Section 6.2 Special Allocation Rules..................................39
Section 6.3 Allocations for Tax Purposes..............................40
Article 7
Management And Operations Of Business
Section 7.1 Management................................................41
Section 7.2 Certificate of Limited Partnership........................46
Section 7.3 Restriction on General Partner's Authority................47
Section 7.4 Responsibility for Expenses...............................47
Section 7.5 Outside Activities of the General Partner.................48
Section 7.6 Contracts with Affiliates.................................48
Section 7.7 Indemnification...........................................49
Section 7.8 Liability of the General Partner..........................50
Section 7.9 Other Matters Concerning the General Partner..............51
Section 7.10 Title to Partnership Assets...............................52
Section 7.11 Reliance by Third Parties.................................52
Section 7.12 Redemption of Units Held by General Partner...............53
Article 8
Rights And Obligations Of Limited Partners
Section 8.1 Limitation of Liability...................................53
Section 8.2 Management of Business....................................53
Section 8.3 Outside Activities of Limited Partners....................53
Section 8.4 Priority Among Partners...................................54
Section 8.5 Rights of Limited Partners Relating to the Partnership....54
Section 8.6 Redemption of Units.......................................55
Section 8.7 Regency's Assumption of Right.............................58
Article 9
Books, Records, Accounting And Reports
Section 9.1 Records and Accounting....................................59
Section 9.2 Fiscal Year...............................................59
Section 9.3 Reports...................................................59
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Article 10
Tax Matters
Section 10.1 Preparation of Tax Returns................................60
Section 10.2 Tax Elections.............................................60
Section 10.3 Tax Matters Partner.......................................60
Section 10.4 Organizational Expenses...................................61
Article 11
Transfers And Withdrawals
Section 11.1 Transfer..................................................62
Section 11.2 Transfer of General Partner's Partnership Interests.......62
Section 11.3 Limited Partners' Rights to Transfer......................63
Section 11.4 Substituted Limited Partners..............................66
Section 11.5 Assignees.................................................66
Section 11.6 General Provisions........................................67
Article 12
Admission Of Partners
Section 12.1 Admission of Successor General Partner....................68
Section 12.2 Admission of Additional Limited Partners..................68
Section 12.3 Amendment of Agreement and Certificate....................69
Section 12.4 Representations and Warranties of Additional Limited
Partners..................................................69
Article 13
Dissolution And Liquidation
Section 13.1 Dissolution...............................................69
Section 13.2 Winding Up................................................70
Section 13.3 Compliance with Timing Requirements of Regulations;
Allowance for Contingent or Unforeseen Liabilities
or Obligations............................................73
Section 13.4 Deficit Capital Account Restoration.......................73
Section 13.5 Deemed Distribution and Recontribution....................74
Section 13.6 Rights of Limited Partners................................75
Section 13.7 Notice of Dissolution.....................................75
Section 13.8 Cancellation of Certificate of Limited Partnership........75
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Section 13.9 Reasonable Time for Winding-Up............................75
Article 14
Amendment Of Partnership Agreement; Meetings
Section 14.1 Amendments................................................75
Section 14.2 Meetings of Limited Partners..............................79
Article 15
General Provisions
Section 15.1 Addresses and Notice......................................79
Section 15.2 Titles and Captions.......................................80
Section 15.3 Pronouns and Plurals......................................80
Section 15.4 Further Action............................................80
Section 15.5 Binding Effect............................................80
Section 15.6 Waiver of Partition.......................................80
Section 15.7 Entire Agreement..........................................80
Section 15.8 Remedies Not Exclusive....................................80
Section 15.9 Time......................................................81
Section 15.10 Creditors.................................................81
Section 15.11 Waiver....................................................81
Section 15.12 Execution Counterparts....................................81
Section 15.13 Applicable Law............................................81
Section 15.14 Invalidity of Provisions..................................81
Article 16
Power Of Attorney
Section 16.1 Power of Attorney.........................................81
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SCHEDULES
Schedule 7.8(b) Regency's PFIC Obligations
Schedule 8.6(a) Transfer Restrictions in Regency's Articles of Incorporation
Schedule 13.4(a) Electing Partners with Deficit Capital Account Make-up
Requirement
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EXHIBITS
Exhibit A Partners and Partnership Interests (addresses)
Exhibit B Notice of Redemption
Exhibit C Security Capital Waiver and Consent Agreement
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FOURTH AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP
OF
REGENCY CENTERS, L.P.
THIS FOURTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP is
dated as of April 1, 2001, by and among Regency Centers Corporation (formerly
Regency Realty Corporation), a Florida corporation, as general partner (the
"General Partner"), and those additional persons who from time to time agree to
be bound by this Agreement as limited partners (the "Limited Partners"), and
amends and restates the Third Amended and Restated Agreement of Limited
Partnership of the Partnership dated as of September 1, 1999.
Background
Limited Partners (the "Original Limited Partners") who formerly were
partners of Branch Properties, L.P. or its affiliates were admitted to the
Partnership on March 7, 1997 pursuant to the Amended and Restated Agreement of
Limited Partnership as of that date (as amended, the "Initial Agreement").
In February 1998, Regency Realty Corporation ("Regency") merged with
Regency Atlanta, Inc., which was then the general partner of the Partnership,
with Regency being the surviving corporation in the merger. Accordingly, Regency
became the General Partner of the Partnership. Regency also caused the merger
into the Partnership of its subsidiary, Regency Centers, Inc., which owned at
least 35 shopping center properties immediately prior to the merger.
In connection with the admission of limited partners upon the
Partnership's acquisition of assets from Midland Development Group, Inc. and its
affiliates, the General Partner amended and restated the Initial Agreement on
March 5, 1998 (the "Second Amended Agreement") (i) to provide for admitting
Additional Limited Partners (as defined below) to the Partnership from time to
time, (ii) to make certain changes to the provisions governing the maintenance
of Capital Accounts, and (iii) to delete matters of historical interest.
In connection with the issuance by the Partnership of $80 million
Series A Preferred Units (as defined below) to an institutional investor
pursuant to Section 4.2 hereof, the General Partner and Security Capital (as
defined below) entered into Amendment No. 1 to the Second Amended Agreement on
June 25, 1998 (the "Preferred Unit Amendment"). The Preferred Unit Amendment
designated the rights, preferences and limitations of the Series A Preferred
Units and was approved by the holders of a majority of the Original Limited
Partnership Units and the holders of a majority of the Additional Units.
Pursuant to Article XIV and Section 4.2, the Second Amended Agreement,
as amended, was amended and restated on September 1, 1999 (the "Third Amended
Agreement") (i) to reflect the admission of the Series A Preferred Partners (as
defined below), (ii) to incorporate the Preferred Unit Amendment, (iii) to make
certain changes to the allocations of
Net Income and Net Loss, (iv) to authorize the issuance of Preferred Units and
Additional Units from time to time, and (v) to delete matters of historical
interest.
The Third Amended Agreement also contemplated that the General Partner
would eventually contribute, directly or indirectly through nominee agreements,
all its assets to the Partnership, subject to applicable consents of third
parties or in the case of shopping centers securing $51 million of securitized
mortgage debt due November 5, 2000, upon the repayment of such debt, so as to
cause the Partnership to become an "UPREIT".
In connection with their approval of the Third Amended Agreement,
pursuant to Section 14.1(a) and Section 4.2, Original Limited Partners holding
95.3% of the Original Limited Partnership Interests and Additional Limited
Partners holding 97.0% of the Additional Limited Partnership Interests consented
to amending and restating the Third Amended Agreement, in the event that the
Partnership became an UPREIT, (i) to provide for the Units of all Partners
(other than Preferred Units) to be pari passu with respect to distributions and
to conform the allocations of Net Income and Net Loss to such revised economic
sharing arrangement, and (ii) to authorize the issuance of Units to the General
Partner from time to time, subject to the conditions set forth in Section
4.2(b)(i), in connection with, and as a result of the Partnership becoming an
UPREIT. Because Section 4.2(b) of this Agreement provides for the Units held by
the General Partner to mirror one-for-one the outstanding shares of capital
stock of the General Partner and Section 7.5 prohibits the General Partner from
engaging in business except through or for the account of the Partnership, these
UPREIT amendments insure that Limited Partners (other than Preferred Partners)
cannot receive lower distributions than common shareholders of Regency.
Therefore, these UPREIT amendments do not adversely affect the Limited Partners.
The Third Amended Agreement provided that, at such time as the
Partnership satisfied the UPREIT criteria established in the Third Amended
Agreement, the Third Amended Agreement would be amended and restated by this
Fourth Amended and Restated Agreement ("Fourth Amended Agreement"). One of such
criteria consists of the approval of this Fourth Amended Agreement by those
Persons (or their transferees) who were Limited Partners on the date of adoption
of the Third Amended Agreement but had not then consented to the Third and
Fourth Amended Agreements, so that this Fourth Amended Agreement will have been
approved by unanimous consent of all Persons who were Limited Partners on that
date or their transferees (collectively, the "Preexisting Partners," which term
includes any transferee of a Preexisting Partner) (such unanimous consent
requirement may be reduced, in Regency's discretion, to the consent of
Preexisting Partners holding not less than 85% of the outstanding Units held by
the Preexisting Partners). Since the date of adoption of the Third Amended
Agreement, the holders of at least 95.7%, but not 100%, of the Units held by the
Preexisting Partners have consented to the adoption of this Fourth Amended
Agreement. Regency determined that, and by execution of this Agreement hereby
represents and warrants that, on February 15, 2001, the Partnership satisfied
the UPREIT criteria established in the Third Amended Agreement for this Fourth
Amended Agreement to be effective, and Regency has given written notice to such
effect to the Limited Partners and of the applicability of Section 14.1(g)
herein.
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NOW, THEREFORE, the Third Amended Agreement is hereby amended and
restated as follows (matters in italics are agreements with the Original Limited
Partners only).
Article 1
Defined Terms
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
"Act" means the Delaware Revised Uniform Limited Partnership Act, as it
may be amended from time to time, and any successor to such statute.
"Additional Limited Partner" means a Person admitted to the Partnership
as a Limited Partner pursuant to Section 4.2 hereof (other than (i) a Preferred
Partner, (ii) the General Partner or (iii) any Affiliate of the General Partner
other than a Property Affiliate) and who is shown as such on the books and
records of the Partnership, including the Persons admitted in connection with
the Partnership's acquisition of assets from Midland Development Group, Inc. and
certain of its affiliated entities.
"Additional Units" means Units issued to an Additional Limited Partner.
The distribution rights of the Additional Units are pari passu with the Original
Limited Partnership Units.
"Adjusted Capital Account" means the Capital Account maintained for
each Partner as of the end of each Partnership Year (i) increased by any amounts
which such Partner is obligated to restore pursuant to any provision of this
Agreement or is deemed to be obligated to restore pursuant to the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5) and (ii)
decreased by the items described in Regulations Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account is intended to comply with
the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.
"Adjusted Capital Account Deficit" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Adjusted Capital Account as of
the end of the relevant Partnership Year.
"Adjusted Series A Preferred Units" of a Partner means the number of
Series A Preferred Units owned by the Partner multiplied by the quotient
obtained by dividing $50 by $24.25 (the Value of a Share on June 25, 1998).
"Affiliate" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by or under common control with such Person.
"Agreement" means this Fourth Amended and Restated Agreement of Limited
Partnership, as it may be amended, supplemented or restated from time to time.
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"Articles of Incorporation" means the Amended and Restated Articles of
Incorporation of Regency, as filed with the Florida Department of State, as
further amended or restated from time to time.
"Assignee" means a Person to whom one or more Partnership Units have
been transferred in a manner permitted under this Agreement, but who has not
become a Substituted Limited Partner, and who has the rights set forth in
Section 11.5.
"Available Cash" means with respect to any period for which such
calculation is being made:
(a) all cash revenues and funds received by the Partnership
from whatever source (excluding the proceeds of any Capital
Contribution and excluding Capital Transaction Proceeds) plus
the amount of any reduction (including, without limitation, a
reduction resulting because the General Partner determines
such amounts are no longer necessary) in reserves of the
Partnership, which reserves are referred to in clause (b)(iv)
below;
(b) less the sum of the following (except to the extent made
with the proceeds of any Capital Contribution and except to the
extent taken into account in determining Capital Transaction
Proceeds):
(i) all interest, principal and other debt payments
made during such period by the Partnership,
(ii) all other cash expenditures (including capital
expenditures) made by the Partnership during such period,
(iii) investments in any entity (including loans made
thereto) to the extent that such investments are not otherwise
described in clauses (b)(i) or (ii), and
(iv) the amount of any increase in reserves
established during such period which the General Partner
determines is necessary or appropriate in its sole and absolute
discretion.
Notwithstanding the foregoing, Available Cash shall not include any cash
received or reductions in reserves, or take into account any disbursements made
or reserves established, after commencement of the dissolution and liquidation
of the Partnership.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in New York City, New York are authorized or required by
law to close.
"Capital Account" means the Capital Account maintained for a Partner
pursuant to Section 4.4 hereof.
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"Capital Contribution" means, with respect to any Partner, any cash,
cash equivalents or the value (as set forth by separate agreement) of property
which such Partner contributes or is deemed to contribute to the Partnership
pursuant to Section 4.1, Section 4.2 or Section 4.5 hereof and which shall be
treated as a contribution to the Partnership pursuant to Section 721(a) of the
Code.
"Capital Transaction" means a sale, exchange or other disposition
(other than in liquidation of the Partnership) or a financing or refinancing by
the Partnership (which shall not include any loan or financing to the General
Partner as permitted by Section 7.1(a)(iii)) of a Partnership asset or any
portion thereof.
"Capital Transaction Proceeds" means the net cash proceeds of a Capital
Transaction, after deducting all expenses incurred in connection therewith and
after application of any proceeds, at the sole discretion of the General
Partner, toward the payment of any indebtedness of the Partnership whether or
not secured by the property that is the subject of that Capital Transaction, the
purchase, improvement or expansion of Partnership property, or the establishment
of any reserves deemed reasonably necessary by the General Partner, including
reserves for the purchase, improvement or expansion of Partnership property.
"Cash Amount" means an amount of cash arrived at by multiplying (i) the
number of Partnership Units that are the subject of a Notice of Redemption times
(ii) the Unit Adjustment Factor times (iii) the Value on the Valuation Date of a
Share.
"Certificate" means the Certificate of Limited Partnership relating to
the Partnership filed in the office of the Secretary of State of the State of
Delaware, as amended from time to time in accordance with the terms hereof and
the Act.
"Code" means the Internal Revenue Code of 1986, as amended. Any
reference herein to a specific section or sections of the Code shall be deemed
to include a reference to any corresponding provision of future law.
"Common Stock" means the voting Common Stock, $0.01 par value, of
Regency.
"Common Units" means the Original Limited Partnership Units, the
Additional Units and any other Partnership Interests in the Partnership
hereafter authorized, issued or outstanding which are entitled to distributions
and to rights upon voluntary or involuntary liquidation, winding-up or
dissolution only out of any assets remaining after all Preferred Units have
received the amounts to which they are entitled.
"Consent" means, except where this Agreement expressly specifies
otherwise, with respect to Limited Partners holding any class of Units (other
than Series A Preferred Units), the written consent or affirmative vote of those
Limited Partners holding a majority of such Units outstanding at the time in
question. The Consent of the Original Limited Partners means the written consent
or affirmative vote of the Original Limited Partners holding a majority of the
Original Limited Partnership Units outstanding at the time in question. Except
where this Agreement expressly specifies otherwise, the Consent of the Limited
Partners means the
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written consent or affirmative vote of the Limited Partners holding a majority
of the Original Limited Partnership Units and Additional Units outstanding at
the time in question, treating such Units as a single class, and shall exclude
any Partners holding Preferred Units unless this Agreement is amended to
expressly provide for a particular class or series of Preferred Units to vote
together with the holders of Common Units as a single class. "Consent of the
Limited Partners" shall be determined excluding any Units held by the General
Partner or any of its Affiliates other than a Property Affiliate, who shall have
no right to vote on any matter for which the consent of the Limited Partners is
solicited.
"Contribution Agreement" means that certain Contribution Agreement and
Plan of Reorganization, dated as of February 10, 1997, by and among Branch
Properties, L.P., Branch Realty Inc. and Regency.
"Depreciation" means for each Partnership Year or other period, an
amount equal to the federal income tax depreciation, amortization, or other cost
recovery deduction allowable with respect to an asset for such year or other
period, except that if the Gross Asset Value of an asset differs from its
adjusted basis for federal income tax purposes at the beginning of such year or
other period, Depreciation shall be an amount which bears the same ratio to such
beginning Gross Asset Value as the federal income tax depreciation,
amortization, or other cost recovery deduction for such year bears to such
beginning adjusted tax basis; provided, however, that if the federal income tax
depreciation, amortization, or other cost recovery deduction for such year is
zero, Depreciation shall be determined with reference to such beginning Gross
Asset Value using any reasonable method selected by the General Partner, except
that in the case of a zero basis property contributed by an Original Limited
Partner, such property shall be depreciated for book purposes over a period of
not more than ten years.
"Event of Dissolution" has the meaning set forth in Section 13.1.
"Excess Units" has the meaning set forth in Section 4.5(g)(i)(C).
"Exchange Notice" has the meaning set forth in Section 4.5(g)(ii)(A).
"Exchange Price" has the meaning set forth in Section 4.5(g)(i)(A).
"First Closing" has the meaning set forth in the Contribution
Agreement.
"General Partner" means Regency Centers Corporation (formerly Regency
Realty Corporation) or its permitted successors as a general partner of the
Partnership.
"General Partner Units" means the Partnership Interest in the
Partnership owned by the General Partner or any Affiliate other than a Property
Affiliate but (i) shall exclude any Series A Preferred Units and any other
Preferred Units issued in compliance with this Agreement and (ii) also shall
exclude any other types of Common Units issued to the General Partner pursuant
to Section 4.2(b)(i) which do not mirror the Common Stock. Pursuant to this
Fourth Amended Agreement, all Class B Units (as defined in the Third Amended
Agreement) have been reclassified as General Partner Units.
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"General Partnership Interest" means a Partnership Interest held by a
General Partner that is a general partnership interest.
"Gross Asset Value" means with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:
(a) The initial Gross Asset Value of any asset contributed
by a Partner to the Partnership shall be the fair market value
(exclusive of liabilities) of such asset, as determined by the General
Partner, unless required to be determined in some other manner herein;
(b) The Gross Asset Values of all Partnership assets shall
be adjusted to equal their respective fair market values (exclusive of
liabilities), as determined by the General Partner, as of the following
times: (i) the acquisition of an additional interest in the Partnership
by any new or existing Partner in exchange for more than a de minimis
capital contribution; (ii) the distribution by the Partnership to a
Partner of more than a de minimis amount of property as consideration
for an interest in the Partnership; and (iii) the liquidation of the
Partnership within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g); provided, however, that adjustments pursuant to
clauses (i) and (ii) above shall be made only if the General Partner
reasonably determines that such adjustments are necessary or
appropriate to reflect the relative economic interests of the Partners
in the Partnership;
(c) The Gross Asset Value of any Partnership asset
distributed to any Partner shall be adjusted to equal the fair market
value (exclusive of liabilities) of such asset on the date of
distribution as determined by the General Partner; and
(d) The Gross Asset Values of Partnership assets shall be
increased (or decreased) to reflect any adjustments to the adjusted
basis of such assets pursuant to Code Section 734(b) or Code Section
743(b), but only to the extent that such adjustments are taken into
account in determining Capital Accounts pursuant to Regulations Section
1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall
not be adjusted pursuant to this paragraph (d) to the extent the
General Partner determines that an adjustment pursuant to paragraph (b)
above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this paragraph (d).
If the Gross Asset Value of an asset has been determined or adjusted pursuant to
paragraphs (a), (b), or (d) above, such Gross Asset Value shall thereafter be
adjusted by the Depreciation taken into account with respect to such asset for
purposes of computing profits and losses.
"Immediate Family" means, with respect to any natural Person, such
natural Person's spouse, parents, descendants, nephews, nieces, brothers and
sisters and trusts for the benefit of any of the foregoing.
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"Incapacity" or "Incapacitated" means, (i) as to any individual
Partner, death, total physical disability or entry by a court of competent
jurisdiction adjudicating him incompetent to manage his Person or his estate;
(ii) as to any corporation which is a Partner, the filing of a certificate of
dissolution, or its equivalent, for the corporation or the revocation of its
charter; (iii) as to any partnership which is a Partner, the dissolution and
commencement of winding up of the partnership; (iv) as to any estate which is a
Partner, the distribution by the fiduciary of the estate's entire interest in
the Partnership; (v) as to any trustee of a trust which is a Partner, the
termination of the trust (but not the substitution of a new trustee); or (vi) as
to any Partner, the bankruptcy of such Partner. For purposes of this definition,
bankruptcy of a Partner shall be deemed to have occurred when the Partner (a)
makes an assignment for the benefit of creditors, (b) files a voluntary petition
in bankruptcy, (c) is adjudged a bankrupt or insolvent, or has entered against
him an order of relief in any bankruptcy or insolvency proceeding, (d) files a
petition or answer seeking for himself any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
statute, law or regulation, (e) files an answer or other pleading admitting or
failing to contest the material allegations of a petition filed against him in
any proceeding of this nature, (f) seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator of the Partner or of all or any
substantial part of his properties, (g) is the debtor in any proceeding seeking
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any statute, law or regulation, which has not been
dismissed within 120 days after the commencement thereof, or (h) is the subject
of a proceeding whereby a trustee, receiver or liquidator is appointed for the
Partner or all or any substantial part of its properties without the Partner's
consent or acquiescence of a trustee, receiver or liquidator, and such
appointment has not been vacated or stayed within 90 days after the appointment
or such appointment is not vacated within 90 days after the expiration of any
such stay.
"Indemnitee" means (i) any Person made a party to a proceeding by
reason of his status as (a) the General Partner, (b) a Limited Partner or (c) a
director or officer of the Partnership or a Partner, and (ii) such other Persons
(including Affiliates of the General Partner or the Partnership) acting in good
faith on behalf of the Partnership as determined by the General Partner in its
good faith judgment other than for any action by such Person involving fraud,
willful misconduct or gross negligence.
"IRS" means the Internal Revenue Service, which administers the
internal revenue laws of the United States.
"Junior Units" has the meaning set forth in Section 4.5(c)(iv).
"Limited Partner" means any Person named as a Limited Partner in
Exhibit A attached hereto, as such Exhibit may be amended from time to time in
accordance with the terms of this Agreement, or any Substituted Limited Partner,
Preferred Partner or Additional Limited Partner, in such Person's capacity as a
Limited Partner in the Partnership.
"Limited Partnership Interest" means a Partnership Interest of a
Limited Partner in the Partnership representing a fractional part of the
Partnership Interests of all Limited Partners
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and includes any and all benefits to which the holder of such a Partnership
Interest may be entitled as provided in this Agreement, together with all
obligations of such Person to comply with the terms and provisions of this
Agreement. A Limited Partnership Interest may be expressed as a number of
Preferred Units, Common Units or General Partner Units as provided herein.
"Liquidating Transaction" means any sale or other disposition of all or
substantially all of the assets of the Partnership following the adoption by the
General Partner of a plan of liquidation for the Partnership.
"Liquidator" has the meaning set forth in Section 13.2.
"Net Income" and "Net Loss" means for any taxable period, an amount
equal to the Partnership's taxable income or loss for such taxable period
determined in accordance with Section 703(a) of the Code (for this purpose all
items of income, gain, loss or deduction required to be stated separately
pursuant to Section 703(a)(1) of the Code shall be included in taxable income or
loss), with the following adjustments:
(a) Except as otherwise provided in Regulations Section
1.704-1(b)(2)(iv)(m), the computation of all items of income, gain,
loss and deduction shall be made without regard to any election under
Section 754 of the Code which may be made by the Partnership; provided,
that the amounts of any adjustments to the adjusted bases of the assets
of the Partnership made pursuant to Section 734 of the Code as a result
of the distribution of property by the Partnership to a Partner (to
the extent that such adjustments have not previously been reflected in
the Partners' Capital Accounts) shall be reflected in the Capital
Accounts of the Partners in the manner and subject to the limitations
prescribed in Regulations Section 1.704-1(b)(2)(iv)(m).
(b) Any income of the Partnership that is exempt from
federal income tax and not otherwise taken into account in computing
Net Income or Net Loss pursuant to this definition shall be added to
such Net Income or Net Loss.
(c) The computation of all items of income, gain, loss and
deduction shall be made without regard to the fact that items described
in Sections 705(a)(1)(B) or 705(a)(2)(B) of the Code are not includable
in gross income or are neither currently deductible nor capitalized for
federal income tax purposes.
(d) Any income, gain or loss attributable to the taxable
disposition of any Partnership property shall be determined as if the
adjusted basis of such property as of such date of disposition were
equal in amount to the Partnership's Gross Asset Value with respect to
such property as of such date.
(e) In lieu of the depreciation, amortization, and other
cost recovery deductions taken into account in computing such taxable
income or loss, there shall be taken into account Depreciation for such
fiscal year.
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(f) In the event the Gross Asset Value of any Partnership
asset is adjusted pursuant to clause (b) or (c) of the definition
thereof, the amount of any such adjustment shall be taken into account
as gain or loss from the disposition of such asset for purposes of
computing Net Income and Net Loss.
(g) Any items specially allocated under Section 6.2 and
Section 6.3 hereof shall not be taken into account.
Solely for purposes of allocating Net Income or Net Loss in any Fiscal
Year to the holders of the Series A Preferred Units, items of Net Income and Net
Loss, as the case may be, shall not include Depreciation with respect to
properties (or groupings of properties selected by the General Partner using any
method determined by it to be reasonable) that are "ceiling limited" in respect
of the holders of the Series A Preferred Units. For purposes of the preceding
sentence, Partnership property shall be considered ceiling limited in respect of
a holder of Series A Preferred Units if Depreciation attributable to such
Partnership property which would otherwise be allocable to such Partner, without
regard to this paragraph, exceeded depreciation determined for federal income
tax purposes attributable to such Partnership property which would otherwise be
allocated to such Partner by more than 5%.
"Non-U.S. Person" means with respect to the acquisition, ownership or
transfer of any Partnership Interest or Shares, the direct or indirect
acquisition or ownership thereof by or a transfer that results in the direct or
indirect ownership thereof by any Person who is not (i) a citizen or resident of
the United States, (ii) a partnership or corporation created or organized in the
United States or under the laws of the United States or any state therein
(including the District of Columbia), or (iii) a foreign estate or trust within
the meaning of Section 7701(a)(31) of the Code.
"Nonrecourse Deductions" has the meaning set forth in Regulations
Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a
Partnership Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(c).
"Nonrecourse Liability" has the meaning set forth in Regulations
Section 1.752-1(a)(2).
"Notice of Redemption" means the Notice of Redemption, Security
Agreement and Investor Questionnaire substantially in the form of Exhibit B to
this Agreement, as it may be amended from time to time by the General Partner
effective upon written notice to the Limited Partners.
"Original Limited Partner" means the Partners who received Original
Limited Partnership Units distributed by Branch Properties, L.P. to its
respective partners pursuant to the Contribution Agreement. The Original Limited
Partners are listed on Exhibit A attached hereto. The term "Original Limited
Partner" shall also include any permitted transferee of an Original Limited
Partner pursuant to Section 11.3 other than (i) the General Partner or (ii) any
Affiliate of the General Partner other than a Property Affiliate.
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"Original Limited Partnership Unit" means a Partnership Unit issued to
an Original Limited Partner. The term "Original Limited Partnership Unit" does
not include or refer to any Preferred Units, Additional Units or General Partner
Units.
"Parity Preferred Units" means any class or series of Partnership
Interests of the Partnership now or hereafter authorized, issued or outstanding
expressly designated by the Partnership to rank on a parity with Series A
Preferred Units with respect to distributions or rights upon voluntary or
involuntary liquidation, winding-up or dissolution of the Partnership, or both,
as the context may require, whether or not the dividend rates, dividend payment
dates or redemption or liquidation prices per Unit or conversion rights or
exchange rights shall be different from those of the Series A Preferred Units.
"Partner" means a General Partner or a Limited Partner, and "Partners"
means the General Partner and the Limited Partners.
"Partner Minimum Gain" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).
"Partner Nonrecourse Debt" has the meaning set forth in Regulations
Section 1.704-2(b)(4).
"Partner Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse
Deductions with respect to a Partner Nonrecourse Debt for a Partnership Year
shall be determined in accordance with the rules of Regulations Section
1.704-2(i)(2).
"Partnership" means the limited partnership formed under the Act and
pursuant to this Agreement, and any successor thereto.
"Partnership Interest" means an ownership interest in the Partnership
representing a Capital Contribution and includes any and all benefits to which
the holder of such a Partnership Interest may be entitled as provided in this
Agreement, together with all obligations of such Person to comply with the terms
and provisions of this Agreement. A Partnership Interest may be expressed as a
number of Preferred Units, Original Limited Partnership Units, Additional Units,
General Partner Units or any other type of Unit permitted by Section 4.2(b)(i).
"Partnership Minimum Gain" has the meaning set forth in Regulations
Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as
any net increase or decrease in Partnership Minimum Gain, for a Partnership Year
shall be determined in accordance with the rules of Regulations Section
1.704-2(d).
"Partnership Record Date" means the record date established by the
General Partner for the distribution of Available Cash pursuant to Section 5.1
hereof to Partners holding
11
Common Units, which record date shall be the same as the record date established
by Regency for a dividend to the holders of Common Stock.
"Partnership Year" means the fiscal year of the Partnership, which
shall be the calendar year.
"Percentage Interest" means, as to a Partner, its interest in the
Partnership as determined by dividing (i) the Adjusted Series A Preferred Units,
Common Units and General Partner Units owned by such Partner by (ii) the total
number of Adjusted Series A Preferred Units, Common Units and General Partner
Units then outstanding and as specified in Exhibit A attached hereto, as such
Exhibit may be amended from time to time in accordance with the terms of this
Agreement.
"Person" means an individual or a corporation, limited liability
company, partnership, trust, unincorporated organization, association or other
entity.
"Pledged Units" means any Units pledged by a Limited Partner to the
Partnership or the General Partner, whether pursuant to this Agreement or by
separate agreement.
"Preexisting Partner" has the meaning set forth at the outset of this
Agreement. Preexisting Partner shall not include any Person who is not a
transferee of a Preexisting Partner and who first became a Limited Partner after
September 1, 1999.
"Preferred Partner" means a Partner who holds Preferred Units.
"Preferred Unit Distribution Payment Date" has the meaning set forth in
Section 4.5(c)(i).
"Preferred Unit Partnership Record Date" has the meaning set forth in
Section 4.5(c)(i).
"Preferred Units" means the Series A Preferred Units and any
Partnership Interests in the Partnership hereafter authorized, issued or
outstanding from time to time pursuant to Section 14.1(g)(ii) expressly
designated by the Partnership to rank senior to the Common Units and General
Partner Units with respect to distributions or rights upon voluntary or
involuntary liquidation, winding-up or dissolution of the Partnership, or both.
"Property Affiliate" means a Person, other than any Subsidiary of
Regency, who contributed property in exchange for a Limited Partnership Interest
and who may be deemed an Affiliate of the General Partner, e.g., because such
person is a director of Regency or owns a significant number of Units or shares
of Regency stock.
"Prime Rate" means, on any date, a fluctuating rate of interest per
annum equal to the rate of interest most recently established by Wachovia Bank
of Georgia, N.A. at its Atlanta, Georgia office (or, at the General Partner's
election, another major lender to the Partnership,
12
at the office with which the Partnership deals), as its prime rate of interest
for loans in United States dollars.
"PTP" means a "publicly traded partnership" within the meaning of
Section 7704 of the Code.
"Recapture Income" means any gain recognized by the Partnership
(computed without regard to any adjustment required by Section 734 or Section
743 of the Code) upon the disposition of any property or asset of the
Partnership, which gain is characterized as ordinary income because it
represents the recapture of deductions previously taken with respect to such
property or asset.
"Recourse Liabilities" has the meaning set forth in Regulations Section
1.752-1(a)(1).
"Redeeming Partner" means a Limited Partner who duly exercised a
Redemption Right.
"Redemption Amount" means the Share Amount or, as determined by the
General Partner in its sole and absolute discretion, the Cash Amount or any
combination of the Share Amount and the Cash Amount.
"Redemption Right" with respect to the Original Limited Partners has
the meaning set forth in Section 8.6(a) hereof and with respect to Additional
Limited Partners means any right granted to such Partners by separate agreement
of the Partnership to redeem such Partners' Limited Partnership Interests for
Common Stock and/or cash.
"Regency" means Regency Centers Corporation (formerly Regency Realty
Corporation), a Florida corporation.
"Regulations" means the Income Tax Regulations, including the Temporary
Regulations, promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).
"REIT" means a real estate investment trust under Section 856 of the
Code.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Capital" means Security Capital U.S. Realty, a Luxembourg
corporation, Security Capital Holdings, S.A., a Luxembourg corporation, and
their Affiliates.
"Series A Preferred Partner" means the Limited Partners who received
Series A Preferred Units and also include any permitted transferee of a Series A
Preferred Partner pursuant to Section 11.3 and the General Partner or any
Affiliate of Regency upon exchange or redemption of the Series A Preferred Units
pursuant to Section 4.5.
"Series A Preferred Stock" has the meaning set forth in Section
4.5(g)(i)(A).
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"Series A Preferred Units" means the Partnership Interest in the
Partnership issued pursuant to Section 4.2 and Section 4.5 hereof representing
8.125% Series A Cumulative Redeemable Preferred Units. The term "Series A
Preferred Unit" does not include or refer to any Original Limited Partnership
Units, Additional Units or General Partner Units.
"Series A Priority Return" means an amount equal to 8.125% per annum,
determined on the basis of a 360 day year of twelve 30 day months (or actual
days for any month which is shorter than a full monthly period), cumulative to
the extent not distributed for any given distribution period, of the stated
value of $50 per Series A Preferred Unit, commencing on the date of issuance of
such Series A Preferred Unit.
"Series A Redemption Price" has the meaning set forth in Section
4.5(e)(i).
"Share Amount" means a number of Shares arrived at by multiplying (i)
the number of Partnership Units that are the subject of a Notice of Redemption
times (ii) the Unit Adjustment Factor.
"Shares" means (i) the Common Stock of Regency, and (ii) any securities
issuable with respect to Shares as a result of the application of Section
11.2(b).
"Specified Redemption Date" means the later of (i) 5:00 p.m. Eastern
time, on the date specified by the Redeeming Partner in such Partner's Notice of
Redemption, or (ii) the close of business, Eastern time, on the first Business
Day after the date in clause (i) if such date is not a Business Day, or (iii)
5:00 p.m. Eastern time, on the tenth Business Day after receipt by the General
Partner of a Notice of Redemption.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests is owned, directly or
indirectly, by such Person.
"Substituted Limited Partner" means a Person who is admitted as a
Limited Partner to the Partnership pursuant to Section 11.4.
"Transaction" has the meaning set forth in Section 11.2(b).
"Unit", "Limited Partnership Unit" or "Partnership Unit" means the
Partnership Interest in the Partnership to be issued to and held by the Limited
Partners pursuant to Section 4.1, Section 4.2 or Section 4.5. The ownership of
Units may be evidenced by such form of certificate as the General Partner may
determine, in its discretion, and the transfer of the Units evidenced by such
certificates shall be governed by Article 11.
"Unit Adjustment Factor" means initially 1.0; provided that, in order
to prevent dilution of the Redemption Right, in the event that Regency (i)
declares or pays a dividend on its outstanding Common Stock in Common Stock or
makes a distribution to all holders of its outstanding Common Stock in Common
Stock, (ii) subdivides its outstanding Common Stock, or (iii) combines its
outstanding Common Stock into a smaller number of shares, except as
14
provided below, the Unit Adjustment Factor shall be adjusted by multiplying the
Unit Adjustment Factor by a fraction, the numerator of which shall be the number
of Shares issued and outstanding on the record date (assuming for such purposes
that such dividend, distribution, subdivision or combination has occurred as of
such time), and the denominator of which shall be the actual number of Shares
(determined without the above assumption) issued and outstanding on the record
date for such dividend, distribution, subdivision or combination. Any adjustment
to the Unit Adjustment Factor shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event. If the General Partner (i) makes a distribution to all holders of
outstanding Units in Units, (ii) subdivides the outstanding Units, or (iii)
combines the outstanding Units into a smaller number of Units at the same time
as a distribution, subdivision or combination, as the case may be, occurs with
respect to the Common Stock, in such manner as to prevent enlargement or
dilution of the right to redeem one Unit for one share of Common Stock, then no
adjustment shall be made to the Unit Adjustment Factor, and such distribution,
subdivision or combination of Units shall take the place of an adjustment to the
Unit Adjustment Factor so as to preserve the one-Share-for-one Unit equivalency
for purposes of any Redemption Right.
"Valuation Date" means the date of receipt by the General Partner of a
Notice of Redemption or, if such date is not a Business Day, the first Business
Day thereafter.
"Value" means, with respect to a Share, the average of the daily market
price of the Common Stock for the ten (10) consecutive trading days immediately
preceding the Valuation Date. The market price for each such trading day shall
be: (i) if the Common Stock is listed or admitted to trading on any securities
exchange or the Nasdaq National Market, the closing price, regular way, on such
day, or if no such sale takes place on such day, the average of the closing bid
and asked prices on such day, (ii) if the Common Stock is not listed or admitted
to trading on any securities exchange or the Nasdaq National Market, the last
reported sale price on such day or, if no sale takes place on such day, the
average of the closing bid and asked prices on such day, as reported by a
reliable quotation source designated by the General Partner, or (iii) if the
Common Stock is not listed or admitted to trading on any securities exchange or
the Nasdaq National Market and no such last reported sale price or closing bid
and asked prices are available, the average of the reported high bid and low
asked prices on such day, as reported by a reliable quotation source designated
by the General Partner, or if there shall be no bid and asked prices on such
day, the average of the high bid and low asked prices, as so reported, on the
most recent day (not more than 10 days prior to the date in question) for which
prices have been so reported; provided, that if there are no bid and asked
prices reported during the 10 days prior to the date in question, the Value of
the Common Stock shall be determined by Regency's board of directors acting in
good faith on the basis of such quotations and other information as it
considers, in its reasonable judgment, appropriate.
15
Article 2
Organizational Matters
Section 2.1 Organization; Application of Act.
(a) Organization and Formation of Partnership. The
Partnership has been formed as a limited partnership under the Act. The
General Partner is the sole general partner and the Limited Partners
are the sole limited partners of the Partnership.
(b) Application of Act. The Partnership is a limited
partnership pursuant to the provisions of the Act and upon the terms
and conditions set forth in this Agreement. Except as expressly
provided herein to the contrary, the rights and obligations of the
Partners and the administration and termination of the Partnership
shall be governed by the Act. No Partner has any interest in any
Partnership property, and the Partnership Interest of each Partner
shall be personal property for all purposes.
Section 2.2 Name. The name of the Partnership is Regency Centers,
L.P. The Partnership's business may be conducted under any other name or names
deemed advisable by the General Partner, including the name of the General
Partner or any Affiliate thereof. The words "Limited Partnership," "L.P.,"
"Ltd." or similar words or letters shall be included in the Partnership's name
where necessary for the purposes of complying with the laws of any jurisdiction
that so requires. The General Partner in its sole and absolute discretion may
change the name of the Partnership at any time and from time to time and shall
promptly notify the Limited Partners of such change; provided, that the name of
the Partnership may not be changed to include the name, or any variant thereof,
of any Limited Partner without the written consent of that Limited Partner.
Section 2.3 Registered Office and Agent; Principal Office. The
address of the registered office of the Partnership in the State of Delaware is
located at 0000 Xxxxxx Xxxx, Xxxx xx Xxxxxxxxxx, Xxxxxx of Xxx Xxxxxx, Xxxxxxxx
00000, and the registered agent for service of process on the Partnership in the
State of Delaware at such registered office is Corporation Service Company. The
principal office of the Partnership is 000 X. Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxxxx, Xxxxxxx 00000, or such other place as the General Partner may from
time to time designate by notice to the Limited Partners. The Partnership may
maintain offices at such other place or places within or outside the State of
Florida as the General Partner deems advisable.
Section 2.4 Term. The term of the Partnership shall commence on the
date hereof and shall continue until December 31, 2097, unless it is dissolved
sooner pursuant to the provisions of Article 13 or as otherwise provided by law.
Article 3
Purpose
Section 3.1 Purpose and Business. The purpose and nature of the
business to be conducted by the Partnership is (i) to conduct any business that
may be lawfully conducted by a
16
limited partnership organized pursuant to the Act and in connection therewith to
sell or otherwise dispose of Partnership assets, (ii) to enter into any
partnership, joint venture or other similar arrangement to engage in any of the
foregoing or the ownership of interests in any entity engaged in any of the
foregoing and (iii) to do anything necessary or incidental to the foregoing
which, in each case, is not in breach of this Agreement; provided, however, that
each of the foregoing clauses (i), (ii), and (iii) shall be limited and
conducted in such a manner as to permit Regency at all times to be classified as
a REIT, unless Regency provides notice to the Partnership that it intends to
cease or has ceased to qualify as a REIT.
Section 3.2 Powers. The Partnership is empowered to do any and all
acts and things necessary, appropriate, proper, advisable, incidental to or
convenient for the furtherance and accomplishment of the purposes and business
described herein and for the protection and benefit of the Partnership;
provided, however, that the Partnership shall not take, or refrain from taking,
any action which, in the judgment of the General Partner, (i) could adversely
affect the ability of Regency to continue to qualify as a REIT, unless Regency
provides notice to the Partnership that it intends to cease or has ceased to
qualify as a REIT, (ii) could subject Regency to any additional taxes under
Section 857 or Section 4981 of the Code or (iii) could violate any law or
regulation of any governmental body or agency having jurisdiction over the
General Partner, Regency or their securities, unless such action (or inaction)
shall have been specifically consented to by the General Partner in writing.
Article 4
Capital Contributions; Issuance Of Units;
Capital Accounts
Section 4.1 Capital Contributions of the Partners.
(a) Initial Capital Contributions of Original Limited
Partners. Branch Properties, L.P. has contributed property to the
Partnership which shall be deemed to have been contributed by its
respective partners as Original Limited Partners. The Original Limited
Partners who have not exercised a Redemption Right with respect to all
their Units are set forth on Exhibit A, together with their respective
number of Units and their respective Percentage Interests. Percentage
Interests of the Original Limited Partners shall be adjusted in Exhibit
A from time to time by the General Partner to the extent permitted by
this Agreement to reflect accurately redemptions, Capital
Contributions, the issuance of Additional Units or General Partner
Units, or similar events having an effect on a Partner's Percentage
Interest or number of Units.
(b) Initial Capital Contributions of Additional Limited
Partners. Midland Development Group, Inc. and certain of its affiliated
entities and PP Center Limited have contributed property to the
Partnership which shall be deemed to have been contributed by their
respective equity owners as Additional Limited Partners. Such
Additional Limited Partners who have not exercised a Redemption Right
with respect to all their Units are set forth on Exhibit A, together
with their respective number of Units and their respective Percentage
Interests.
17
(c) Capital Contributions by General Partner. The General
Partner has contributed cash or other assets to the Partnership in
exchange for the number of General Partner Units set forth on Exhibit
A. The General Partner also owns the number of General Partner Units
set forth on Exhibit A which were acquired by Regency upon the exchange
by Regency of Shares pursuant to the exercise by former Limited
Partners of Redemption Rights or were issued pursuant to Section
4.2(b).
(d) Capital Contributions of Series A Preferred Partners.
The Series A Preferred Partners have contributed cash to the
Partnership in the amount of $50 per Series A Preferred Unit. The
distribution rights for the Series A Preferred Units shall be senior to
the distribution rights of the Original Limited Partnership Units, the
Additional Units, the General Partner Units and any other Common Units.
The number of Series A Preferred Units issued to the Series A Preferred
Partners is set forth on Exhibit A.
(e) Additional Capital Contributions or Assessments. No
Partner shall be assessed or be required to contribute additional funds
or other property to the Partnership, except for any such amounts which
a Limited Partner may be obligated to repay under Section 5.3 or
Section 13.4. Any additional funds required by the Partnership, as
determined by the General Partner in its reasonable business
judgment, may, at the option of the General Partner and without an
obligation to do so, be contributed by the General Partner as
additional Capital Contributions. If and as the General Partner or any
other Partner makes additional Capital Contributions to the
Partnership, each such Partner shall receive Additional Units, General
Partner Units or other Partnership Interests, subject to the provisions
of Section 4.2 and Section 4.5, and such Partner's Capital Account
shall be adjusted as provided in Section 4.4.
(f) Return of Capital Contributions. Except as otherwise
expressly provided herein, the Capital Contribution of each Partner
will be returned to that Partner only in the manner and to the extent
provided in Article 5 and Article 13 hereof, and no Partner may
withdraw from the Partnership or otherwise have any right to demand or
receive the return of its Capital Contribution to the Partnership (as
such), except as specifically provided herein. Under circumstances
requiring a return of any Capital Contribution, no Partner shall have
the right to receive property other than cash, except as specifically
provided herein. No Partner shall be entitled to interest on any
Capital Contribution or Capital Account notwithstanding any
disproportion therein as between the Partners. Except as specifically
provided herein, the General Partner shall not be liable for the return
of any portion of the Capital Contribution of any Limited Partner, and
the return of such Capital Contributions shall be made solely from
Partnership assets.
(g) Liability of Limited Partners. No Limited Partner shall
have any further personal liability to contribute money to, or in
respect of, the liabilities or the obligations of the Partnership, nor
shall any Limited Partner be personally liable for any obligations of
the Partnership, except as otherwise provided in Section 4.1(e) or in
18
the Act. No Limited Partner shall be required to make any contributions
to the capital of the Partnership other than its Capital Contribution.
Section 4.2 Issuances of Additional Partnership Interests.
(a) Limitations. Separate agreements relating to the
admission of Additional Limited Partners set forth the provisions, if
any, upon which any Additional Units shall be issued to Additional
Limited Partners in the form of earn-out or as consideration for
additional assets to be contributed by such Additional Limited Partners
to the Partnership. The General Partner shall cause the earn-out
Additional Units to be issued to the Additional Limited Partners
entitled to receive the same, and shall cause the amendment of this
Agreement to reflect the issuance of any such Additional Units.
Subject to the restrictions set forth in Section 4.2(b) and in Section
4.5(f)(ii), the General Partner is hereby authorized to cause the
Partnership at any time or from time to time to issue to the Partners
or to other Persons such Partnership Interests in one or more classes,
or one or more series of any such classes, with such designations,
preferences and relative, participating, optional or other special
rights, powers and duties, and for such consideration as shall be
determined by the General Partner in its sole and absolute discretion,
subject to Delaware law, including, without limitation, (i) the
allocations of items of Partnership income, gain, loss, deduction and
credit to each such class or series of Partnership Interests, (ii) the
right of each such class or series of Partnership Interests to share
in Partnership distributions, and (iii) the rights of each such class
or series of Partnership Interests upon dissolution and liquidation of
the Partnership.
(b) Consent Granted by Limited Partners for Certain
Issuances.
(i) Issuance of Additional Units to General Partner.
As a condition to the effectiveness of this Fourth Amended
Agreement, the Partnership shall:
(A) issue to the General Partner in exchange
for the assets contributed by it additional Units such
that (i) the total number of General Partner Units held
by the General Partner equals the total number of Shares
of Common Stock then outstanding, and (ii) additional
Limited Partnership Interests are issued in the same
number as, and having designations, preferences and
other rights substantially similar to the
designations, preferences and other rights of other
classes of equity of the General Partner then
outstanding, whether consisting of preferred stock or
special common stock; and
(B) redeem and cancel Units previously
issued to the General Partner if and to the extent
necessary in order that there shall be (i) a one-to-one
equivalency between the number of shares of Common
Stock outstanding and the number of General Partner
Units outstanding, and (ii) (subject to Section
14.1(g)(ii), if applicable, in the case of the
19
issuance of Preferred Units) a one-to-one equivalency
between the number of shares of other classes of
equity of the General Partner outstanding and the
number of other classes of Units outstanding.
Thereafter, the Partnership may issue Partnership Interests to
the General Partner in the same number and having
designations, preferences and other rights substantially
similar to the designations, preferences and other rights of,
shares issued by the General Partner provided that:
(A) General Partner Units shall be issued to
match shares of Common Stock issued by the General
Partner; and
(B) The General Partner shall comply with
the following in connection with any such issuance of
Units to the General Partner:
(1) The General Partner shall have
determined in good faith that the issuance of the
matching shares, and the price thereof, are in the best
interests of the General Partner and the Partnership;
(2) Without limiting clause (1), in
the case of the issuance of shares to employees,
directors or independent contractors of the General
Partner or any Subsidiary at a price less than their
fair market value, the compensation committee of the
General Partner's Board of Directors shall reasonably
determine that such issuance is for the benefit of
the Partnership's business or such issuance shall be
pursuant to an incentive plan approved by the
compensation committee and adopted by the General
Partner;
(3) The General Partner shall
contribute the net proceeds to the Partnership from the
issuance of the matching shares, including assets
acquired in exchange for shares and the exercise price
received upon the exercise of options; and
(4) In the case of the issuance of
shares upon the conversion of convertible securities
issued by the General Partner, the General Partner shall
contribute or shall have previously contributed to the
Partnership the net proceeds from the issuance of
such convertible securities.
The cost of issuance of equity the net proceeds of which are
so contributed by the General Partner to the Partnership shall
be deemed a capital contribution to, and a cost of, the
Partnership.
(c) Certain Issuances in the Nature of Stock Split. Nothing
herein shall prohibit the General Partner from issuing Units pro rata
to the holders of existing Units
20
in lieu of adjusting the Unit Adjustment Factor in connection with a
stock split, stock dividend or similar event with respect to the Common
Stock.
Section 4.3 No Preemptive Rights. No Person shall have any
preemptive, preferential or other similar right with respect to (i) additional
Capital Contributions or loans to the Partnership or (ii) issuance or sale of
any Partnership Interests.
Section 4.4 Capital Accounts of the Partners.
(a) General. The Partnership shall maintain for each Partner a
separate Capital Account in accordance with the rules of Regulations
Section 1.704-1(b)(2)(iv). Such Capital Account shall be increased by
(i) the amount of all Capital Contributions made by such Partner to the
Partnership pursuant to this Agreement, (ii) all items of Partnership
income and gain (including income and gain exempt from tax) allocated
to such Partner pursuant to Section 6.1 and Section 6.2 of this
Agreement, and (iii) the amount of any Partnership liabilities assumed
by such Partner or which are secured by any property distributed to
such Partner, and decreased by (x) the amount of cash or Gross Asset
Value of all actual and deemed distributions of cash or property made
to such Partner pursuant to this Agreement, (y) all items of
Partnership deduction and loss allocated to such Partner pursuant to
Section 6.1 and Section 6.2 of this Agreement, and (z) the amount of
any liabilities of such Partner assumed by the Partnership or which are
secured by any property contributed by such Partner to the Partnership.
Additional Capital Contributions shall be deemed to be made by reason
of the issuance, and the Additional Limited Partner's Capital Account
shall be adjusted by an amount equal to the agreed value (as set forth
by separate agreement), of additional Partnership Interests issued to
an Additional Limited Partner pursuant to any earn-out provisions in
the agreement governing such Additional Limited Partner's admission to
the Partnership. Any such additional Capital Contributions shall be
allocated to the items of contributed property contributed by each such
Additional Limited Partner in proportion to their book values at the
time of issuance of the additional Partnership Interests.
(b) Transfers of Partnership Units. A transferee of a
Partnership Interest shall succeed to a pro rata portion of the Capital
Account of the transferor.
(c) Modification by General Partner. The provisions of this
Agreement relating to the maintenance of Capital Accounts are intended
to comply with Regulations Section 1.704-1(b), and shall be interpreted
and applied in a manner consistent with such Regulations. In the event
the General Partner shall determine that it is prudent to modify the
manner in which the Capital Accounts, or any debits or credits thereto
(including, without limitation, debits or credits relating to
liabilities which are secured by contributed or distributed property or
which are assumed by the Partnership, the General Partner, or any
Limited Partners), are computed in order to comply with such
Regulations, the General Partner may make such modification without
regard to Article 14 of this Agreement. The General Partner also shall
(i)
21
make any adjustments that are necessary or appropriate to maintain
equality between the Capital Accounts of the Partners and the amount of
Partnership capital reflected on the Partnership's balance sheet, as
computed for book purposes, in accordance with Regulations Section
1.704-1(b)(2)(iv)(q), and (ii) make any appropriate modifications in
the event unanticipated events might otherwise cause this Agreement not
to comply with Regulations Section 1.704-1(b).
Section 4.5 Issuance of Series A Preferred Units. Pursuant to
authority granted by Section 4.2 with the Consent of the Original Limited
Partners and the Consent of the Additional Limited Partners, the General Partner
caused the Partnership to establish a series of Partnership Interests
representing the Series A Preferred Units, with such designations, preferences
and relative, participating, optional or other special rights, powers and duties
as are set forth in this Section 4.5. In the event of a conflict between this
Section 4.5 and any other provision of this Agreement as to the Series A
Preferred Units, the provisions of this Section 4.5 shall control.
(a) Designation and Number. A series of Partnership Units in
the Partnership designated as the "8.125% Series A Cumulative
Redeemable Preferred Units" is hereby established. The number of Series
A Preferred Units shall be 1,600,000.
(b) Rank. The Series A Preferred Units will, with respect to
distributions or rights upon voluntary or involuntary liquidation,
winding-up or dissolution of the Partnership, or both, rank senior to
all classes or series of Partnership Interests now or hereafter
authorized, issued or outstanding, other than any class or series of
equity securities of the Partnership issued after the issuance of the
Series A Preferred Units and expressly designated in accordance with
this Agreement as ranking on a parity with or senior to the Series A
Preferred Units as to distributions or rights upon voluntary or
involuntary liquidation, winding-up or dissolution of the Partnership,
or both.
(c) Distributions.
(i) Payment of Distributions. Subject to the rights
of holders of Parity Preferred Units and any holders of
Partnership Interests issued after the date of issuance of the
Series A Preferred Units in accordance herewith ranking senior
to the Series A Preferred Units as to the payment of
distributions, holders of Series A Preferred Units shall be
entitled to receive, when, as and if declared by the Partnership
acting through the General Partner, out of Available Cash and
Capital Transaction Proceeds, cumulative preferential cash
distributions at the rate per annum of 8.125% of the original
Capital Contribution per Series A Preferred Unit. Such
distributions shall be cumulative, shall accrue from the
original date of issuance and will be payable (A) quarterly in
arrears, on or before March 31, June 30, September 30 and
December 31 of each year commencing on June 30, 1998 and, (B),
in the event of (i) an exchange of Series A Preferred Units into
Series A Preferred Stock, or (ii) a redemption of
22
Series A Preferred Units, on the exchange date or redemption
date, as applicable (each a "Preferred Unit Distribution Payment
Date"). The amount of the distribution payable for any period
will be computed on the basis of a 360-day year of twelve 30-day
months and for any period shorter than a full quarterly period
for which distributions are computed, the amount of the
distribution payable will be computed on the basis of the actual
number of days elapsed in such a 30-day month. If any date on
which distributions are to be made on the Series A Preferred
Units is not a Business Day, then payment of the distribution to
be made on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day,
in each case with the same force and effect as if made on such
date. Distributions on June 30, 1998 and thereafter on the
Series A Preferred Units will be made to the holders of record
of the Series A Preferred Units on the relevant record dates to
be fixed by the Partnership acting through the General Partner,
which record dates shall be not less than ten (10) days and not
more than thirty (30) Business Days prior to the relevant
Preferred Unit Distribution Payment Date (the "Preferred Unit
Partnership Record Date").
(ii) Limitation on Distributions. No distribution on
the Series A Preferred Units shall be declared or paid or set
apart for payment by the Partnership at such time as the terms
and provisions of any agreement of the Partnership relating to
its indebtedness (other than any agreement with the holder of
Partnership Interests or an Affiliate thereof), prohibits such
declaration, payment or setting apart for payment or provide,
that such declaration, payment or setting apart for payment
would constitute a breach thereof or a default thereunder, or if
such declaration, payment or setting apart for payment shall be
restricted or prohibited by law. Nothing in this Section
4.5(c)(ii) shall be deemed to modify or in any manner limit the
provisions Section 4.5(c)(iii) and (iv).
(iii) Distributions Cumulative. Distributions on the
Series A Preferred Units will accrue whether or not the terms
and provisions of any agreement of the Partnership, including
any agreement relating to its indebtedness at any time prohibit
the current payment of distributions, whether or not the
Partnership has earnings, whether or not there are funds legally
available for the payment of such of such distributions and
whether or not such distributions are authorized. Accrued but
unpaid distributions on the Series A Preferred Units will
accumulate as of the Preferred Unit Distribution Payment Date on
which they first become payable. Distributions on account of
arrears for any past distribution periods may be declared and
paid at any time, without reference to a regular Preferred Unit
Distribution Payment Date to holders of record of the Series A
Preferred Units on the record date fixed by the Partnership
acting through the General Partner which date shall be not less
than
23
ten (10) days and not more than thirty (30) Business Days prior
to the payment date. Accumulated and unpaid distributions
will not bear interest.
(iv) Priority as to Distributions.
(A) So long as any Series A Preferred Units
are outstanding, no distribution of cash or other
property shall be authorized, declared, paid or set
apart for payment on or with respect to any class or
series of Partnership Interests of the Partnership
ranking junior as to the payment of distributions to the
Series A Preferred Units (collectively, "Junior Units"),
nor shall any cash or other property be set aside for or
applied to the purchase, redemption or other acquisition
for consideration of any Series A Preferred Units, any
Parity Preferred Units with respect to distributions or
any Junior Units, unless, in each case, all
distributions accumulated on all Series A Preferred
Units and all classes and series of outstanding Parity
Preferred Units as to payment of distributions have been
paid in full. The foregoing sentence will not prohibit
(a) distributions payable solely in Junior Units, (b)
the conversion of Junior Units or Parity Preferred Units
into Partnership Interests of the Partnership ranking
junior to the Series A Preferred Units as to
distributions, or (c) the redemption of Partnership
Interests corresponding to any Series A Preferred Stock,
Parity Preferred Stock with respect to distributions or
Junior Stock (as such terms are defined herein or in the
Articles of Incorporation) to be purchased by the
General Partner pursuant to Article 5 of the Articles of
Incorporation to preserve the General Partner's status
as a real estate investment trust, provided that such
redemption shall be upon the same terms as the
corresponding purchase pursuant to Article 5 of the
Articles of Incorporation.
(B) So long as distributions have not been
paid in full (or a sum sufficient for such full payment
is not irrevocably deposited in trust for payment) upon
the Series A Preferred Units, all distributions
authorized and declared on the Series A Preferred Units
and all classes or series of outstanding Parity
Preferred Units with respect to distributions shall be
authorized and declared so that the amount of
distributions authorized and declared per Series A
Preferred Unit and such other classes or series of
Parity Preferred Units shall in all cases bear to each
other the same ratio that accrued distributions per
Series A Preferred Unit and such other classes or series
of Parity Preferred Units (which shall not include any
accumulation in respect of unpaid distributions for
prior distribution periods if such class or series of
Parity Preferred Units do not have cumulative
distribution rights) bear to each other.
24
(v) No Further Rights. Holders of Series A Preferred
Units shall not be entitled to any distributions, whether
payable in cash, other property or otherwise, in excess of the
full cumulative distributions described herein.
(d) Liquidation Preference.
(i) Payment of Liquidating Distributions. Subject
to the rights of holders of Parity Preferred Units with respect
to rights upon any voluntary or involuntary liquidation,
dissolution or winding-up of the Partnership and subject to
Partnership Interests ranking senior to the Series A Preferred
Units with respect to rights upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership, the
holders of Series A Preferred Units shall be entitled to receive
out of the assets of the Partnership legally available for
distribution or the proceeds thereof, after payment or provision
for debts and other liabilities of the Partnership, but before
any payment or distributions of the assets shall be made to
holders of any class or series of Partnership Interest that
ranks junior to the Series A Preferred Units as to rights upon
liquidation, dissolution or winding-up of the Partnership, an
amount equal to the sum of (i) a liquidation preference equal to
their positive Capital Account balances, determined after
taking into account all Capital Account adjustments for the
Partnership taxable year during which the liquidation occurs
(other than those made as a result of the liquidating
distribution set forth in this Section 4.5(d)(i) and (ii) an
amount equal to any accumulated and unpaid distributions
thereon, whether or not declared, to the date of payment. In the
event that, upon such voluntary or involuntary liquidation,
dissolution or winding-up, there are insufficient assets to
permit full payment of liquidating distributions to the holders
of Series A Preferred Stock and any Parity Preferred Units as to
rights upon liquidation, dissolution or winding-up of the
Partnership, all payments of liquidating distributions on the
Series A Preferred Units and such Parity Preferred Units shall
be made so that the payments on the Series A Preferred Units and
such Parity Preferred Units shall in all cases bear to each
other the same ratio that the respective rights of the Series A
Preferred Unit and such other Parity Preferred Units (which
shall not include any accumulation in respect of unpaid
distributions for prior distribution periods if such Parity
Preferred Units do not have cumulative distribution rights) upon
liquidation, dissolution or winding-up of the Partnership
bear to each other.
(ii) Notice. Written notice of any such voluntary or
involuntary liquidation, dissolution or winding-up of the
Partnership, stating the payment date or dates when, and the
place or places where, the amounts distributable in such
circumstances shall be payable, shall be given by (x) fax and
(y) by first class mail, postage pre-paid, not less than 30
and not more that 60 days prior to the payment date stated
therein, to each record holder of the Series A Preferred Units
at the respective addresses of such holders as the same shall
appear on the transfer records of the Partnership.
25
(iii) No Further Rights. After payment of the full
amount of the liquidating distributions to which they are
entitled, the holders of Series A Preferred Units will have no
right or claim to any of the remaining assets of the
Partnership.
(iv) Consolidation, Merger or Certain Other
Transactions. The voluntary sale, conveyance, lease, exchange or
transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or
assets of the General Partner to, or the consolidation or merger
or other business combination of the Partnership with or into,
any corporation, trust or other entity (or of any corporation,
trust or other entity with or into the Partnership) shall not be
deemed to constitute a liquidation, dissolution or winding-up of
the Partnership.
(e) Optional Redemption.
(i) Right of Optional Redemption. The Series A
Preferred Units may not be redeemed prior to the fifth
anniversary of the issuance date. On or after such date, the
Partnership shall have the right to redeem the Series A
Preferred Units, in whole or in part, at any time or from time
to time, upon not less than 30 nor more than 60 days' written
notice, at a redemption price, payable in cash, equal to the
Capital Account balance of the holder of Series A Preferred
Units (the "Series A Redemption Price"); provided, however, that
no redemption pursuant to this Section 4.5(e) will be permitted
if the Series A Redemption Price does not equal or exceed the
original Capital Contribution of such holder plus the cumulative
Series A Priority Return, whether or not declared, to the
redemption date to the extent not previously distributed or
distributed on the redemption date pursuant to Section
4.5(c)(i). If fewer than all of the outstanding Series A
Preferred Units are to be redeemed, the Series A Preferred Units
to be redeemed shall be selected pro rata (as nearly as
practicable without creating fractional units).
(ii) Limitation on Redemption.
(A) The Series A Redemption Price of the
Series A Preferred Units (other than the portion thereof
consisting of accumulated but unpaid distributions) will
be payable solely out of the sale proceeds of capital
stock of the General Partner, which will be contributed
by the General Partner to the Partnership as additional
capital contribution, or out of the sale of limited
partner interests in the Partnership and from no other
source. For purposes of the preceding sentence,
"capital stock" means any equity securities (including
Common Stock and Preferred Stock (as such terms are
defined in the Articles of Incorporation)), shares,
participation or other ownership interests (however
designated) and any rights (other than debt securities
convertible into or
26
exchangeable for equity securities) or options to
purchase any of the foregoing.
(B) The Partnership may not redeem fewer
than all of the outstanding Series A Preferred Units
unless all accumulated and unpaid distributions have
been paid on all Series A Preferred Units for all
quarterly distribution periods terminating on or prior
to the date of redemption.
(iii) Procedures for Redemption.
(A) Notice of redemption will be (i) faxed,
and (ii) mailed by the Partnership, by certified mail,
postage prepaid, not less than 30 nor more than 60 days
prior to the redemption date, addressed to the
respective holders of record of the Series A Preferred
Units at their respective addresses as they appear on
the records of the Partnership. No failure to give or
defect in such notice shall affect the validity of the
proceedings for the redemption of any Series A Preferred
Units except as to the holder to whom such notice was
defective or not given. In addition to any information
required by law, each such notice shall state: (i) the
redemption date, (ii) the Series A Redemption Price,
(iii) the aggregate number of Series A Preferred Units
to be redeemed and if fewer than all of the outstanding
Series A Preferred Units are to be redeemed, the number
of Series A Preferred Units to be redeemed held by such
holder, which number shall equal such holder's pro rata
share (based on the percentage of the aggregate number
of outstanding Series A Preferred Units the total number
of Series A Preferred Units held by such holder
represents) of the aggregate number of Series A
Preferred Units to be redeemed, (iv) the place or places
where such Series A Preferred Units are to be
surrendered for payment of the Series A Redemption
Price, (v) that distributions on the Series A Preferred
Units to be redeemed will cease to accumulate on such
redemption date and (vi) that payment of the Series A
Redemption Price will be made upon presentation and
surrender of such Series A Preferred Units.
(B) If the Partnership gives a notice of
redemption in respect of Series A Preferred Units (which
notice will be irrevocable) then, by 12:00 noon, New
York City time, on the redemption date, the Partnership
will deposit irrevocably in trust for the benefit of the
Series A Preferred Units being redeemed funds sufficient
to pay the applicable Series A Redemption Price and will
give irrevocable instructions and authority to pay such
Series A Redemption Price to the holders of the Series A
Preferred Units upon surrender of the Series A Preferred
Units by such holders at the place designated in the
notice of redemption. If the Series A Preferred Units
are evidenced by a certificate and if fewer
27
than all Series A Preferred Units evidenced by any
certificate are being redeemed, a new certificate shall
be issued upon surrender of the certificate evidencing
all Series A Preferred Units, evidencing the unredeemed
Series A Preferred Units without cost to the holder
thereof. On and after the date of redemption,
distributions will cease to accumulate on the Series A
Preferred Units or portions thereof called for
redemption, unless the Partnership defaults in the
payment thereof. If any date fixed for redemption of
Series A Preferred Units is not a Business Day, then
payment of the Series A Redemption Price payable on such
date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment
in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such
payment will be made on the immediately preceding
Business Day, in each case with the same force and
effect as if made on such date fixed for redemption. If
payment of the Series A Redemption Price is improperly
withheld or refused and not paid by the Partnership,
distributions on such Series A Preferred Units will
continue to accumulate from the original redemption date
to the date of payment, in which case the actual payment
date will be considered the date fixed for redemption
for purposes of calculating the applicable Series A
Redemption Price.
(f) Voting Rights.
(i) General. Notwithstanding anything to the
contrary contained in this Agreement, Series A Preferred
Partners will not have any voting rights or right to consent to
any matter requiring the consent or approval of the Limited
Partners, except as otherwise expressly set forth in this
Agreement and except as set forth below.
(ii) Certain Voting Rights. So long as any Series A
Preferred Units remain outstanding, the Partnership shall not,
without the affirmative vote of the holders of at least two-
thirds of the Series A Preferred Units outstanding at the time
(A) authorize or create, or increase the authorized or issued
amount of, any class or series of Partnership Interests ranking
prior to the Series A Preferred Units with respect to payment
of distributions or rights upon liquidation, dissolution or
winding-up or reclassify any Partnership Interests of the
Partnership into any such Partnership Interest, or create,
authorize or issue any obligations or security convertible into
or evidencing the right to purchase any such Partnership
Interests, (B) authorize or create, or increase the authorized
or issued amount of any Parity Preferred Units or reclassify any
Partnership Interest of the Partnership into any such
Partnership Interest or create, authorize or issue any
obligations or security convertible into or evidencing the right
to purchase any such Partnership Interests but only to the
extent such Parity Preferred Units are issued to an affiliate of
the Partnership, other than (I)
28
Security Capital or (II) the General Partner to the extent the
issuance of such interests was to allow the General Partner to
issue corresponding preferred stock to persons who are not
affiliates of the Partnership or (C) either (I) consolidate,
merge into or with, or convey, transfer or lease its assets
substantially as an entirety to, any corporation or other entity
or (II) amend, alter or repeal the provisions of this Agreement,
whether by merger, consolidation or otherwise, that would
materially and adversely affect the powers, special rights,
preferences, privileges or voting power of the Series A
Preferred Units or the holders thereof; provided, however, that
with respect to the occurrence of a merger, consolidation or a
sale or lease of all of the Partnership's assets as an entirety,
so long as (a) the Partnership is the surviving entity and
the Series A Preferred Units remain outstanding with the terms
thereof unchanged, or (b) the resulting, surviving or transferee
entity is a partnership, limited liability company or other
pass-through entity organized under the laws of any state and
substitutes the Series A Preferred Units for other interests in
such entity having substantially the same terms and rights as
the Series A Preferred Units, including with respect to
distributions, voting rights and rights upon liquidation,
dissolution or winding-up, then the occurrence of any such event
shall not be deemed to materially and adversely affect such
rights, privileges or voting powers of the holders of the Series
A Preferred Units and no vote of the Series A Preferred Units
shall be required in such case; and provided further that any
increase in the amount of Partnership Interests or the creation
or issuance of any other class or series of Partnership
Interests, in each case ranking (a) junior to the Series A
Preferred Units with respect to payment of distributions and the
distribution of assets upon liquidation, dissolution or winding-
up, or (b) on a parity to the Series A Preferred Units with
respect to payment of distributions and the distribution of
assets upon liquidation, dissolution or winding-up to the extent
such Partnership Interest are not issued to an affiliate of the
Partnership, other than the General Partner to the extent the
issuance of such interests was to allow the General Partner to
issue corresponding preferred stock to persons who are not
affiliates of the Partnership, shall not be deemed to materially
and adversely affect such rights, preferences, privileges or
voting powers and no vote of the Series A Preferred Units shall
be required in such case.
(g) Exchange Rights.
(i) Right to Exchange.
(A) Series A Preferred Units will be
exchangeable in whole or in part at anytime on or after
the tenth anniversary of the date of issuance, at the
option of the holders thereof, for authorized but
previously unissued shares of 8.125% Series A Cumulative
Redeemable Preferred Stock of Regency (the "Series A
Preferred Stock") at an exchange rate of one share of
Series A Preferred Stock for one Series A Preferred
Unit, subject to adjustment as described below (the
"Exchange
29
Price"), provided that the Series A Preferred Units will
become exchangeable at any time, in whole or in part, at
the option of the holders of Series A Preferred Units
for Series A Preferred Stock if (I) at any time full
distributions shall not have been timely made on any
Series A Preferred Unit with respect to six (6) prior
quarterly distribution periods, whether or not
consecutive, provided, however, that a distribution in
respect of Series A Preferred Units shall be considered
timely made if made within two (2) Business Days after
the applicable Preferred Unit Distribution Payment Date
if at the time of such late payment there shall not be
any prior quarterly distribution periods in respect of
which full distributions were not timely made or (II)
upon receipt by a holder or holders of Series A
Preferred Units of (a) notice from the General Partner
that the General Partner or a Subsidiary of the General
Partner has taken the position that the Partnership is,
or upon the occurrence of a defined event in the
immediate future will be, a PTP and (b) an opinion
rendered by an outside nationally recognized independent
counsel familiar with such matters addressed to a holder
or holders of Series A Preferred Units, that the
Partnership is or likely is, or upon the occurrence of a
defined event in the immediate future will be or likely
will be, a PTP. In addition, the Series A Preferred
Units may be exchanged for Series A Preferred Stock, in
whole or in part, at the option of any holder prior to
the tenth anniversary of the issuance date and after the
third anniversary thereof if such holder of a Series A
Preferred Units shall deliver to the General Partner
either (i) a private ruling letter addressed to such
holder of Series A Preferred Units or (ii) an opinion of
independent counsel reasonably acceptable to the General
Partner based on the enactment of temporary or final
Regulations or the publication of a Revenue Ruling, in
either case to the effect that an exchange of the Series
A Preferred Units at such earlier time would not cause
the Series A Preferred Units to be considered "stock and
securities" within the meaning of Section 351(e) of the
Code for purposes of determining whether the holder of
such Series A Preferred Units is an "investment company"
under Section 721(b) of the Code if an exchange is
permitted at such earlier date. Furthermore, the Series
A Preferred Units may be exchanged in whole or in part
for Series A Preferred Stock at any time after the date
hereof, if both (x) the holder thereof concludes based
on results or projected results that there exists (in
the reasonable judgement of the holder) an imminent and
substantial risk that the holder's interest in the
Partnership does or will represent more than 19.5% of
the total profits or capital interests in the
Partnership (determined in accordance with Regulations
Section 1.731-2(e)(4)) for a taxable year, and (y) the
holder delivers to the General Partner an opinion of
nationally recognized independent counsel to the effect
that there is an imminent and substantial risk that the
holder's
30
interest in the Partnership does or will represent more
than 19.5% of the total profits or capital interests in
the Partnership (determined in accordance with
Regulations Section 1.731-2(e)(4)) for a taxable year.
(B) Notwithstanding anything to the contrary
set forth in Section 4.5(g)(i)(A), if an Exchange Notice
has been delivered to the General Partner, then the
General Partner may, at its option, elect to redeem or
cause the Partnership to redeem all or a portion of the
outstanding Series A Preferred Units for cash in an
amount equal to the original Capital Contribution per
Series A Preferred Unit and all accrued and unpaid
distributions thereon to the date of redemption. The
General Partner may exercise its option to redeem the
Series A Preferred Units for cash pursuant to this
Section 4.5(g)(i)(B) by giving each holder of record of
Series A Preferred Units notice of its election to
redeem for cash, within five (5) Business Days after
receipt of the Exchange Notice, by (i) fax, and (ii)
registered mail, postage paid, at the address of each
holder as it may appear on the records of the
Partnership stating (i) the redemption date, which shall
be no later than sixty (60) days following the receipt
of the Exchange Notice, (ii) the redemption price, (iii)
the place or places where the Series A Preferred Units
are to be surrendered for payment of the redemption
price, (iv) that distributions on the Series A Preferred
Units will cease to accrue on such redemption date; (v)
that payment of the redemption price will be made upon
presentation and surrender of the Series A Preferred
Units and (vi) the aggregate number of Series A
Preferred Units to be redeemed, and if fewer than all of
the outstanding Series A Preferred Units are to be
redeemed, the number of Series A Units to be redeemed
held by such holder, which number shall equal such
holder's pro-rata share (based on the percentage of the
aggregate number of outstanding Series A Preferred Units
the total number of Series A Preferred Units held by
such holder represents) of the aggregate number of
Series A Preferred Units being redeemed.
(C) Upon the occurrence of an event giving
rise to exchange rights pursuant to Section
4.5(g)(i)(A), in the event an exchange of all or a
portion of Series Preferred A Preferred Units pursuant
to Section 4.5(g)(i)(A) would violate the provisions on
ownership limitation of the General Partner set forth in
Article 5 of the Articles of Incorporation, the General
Partner shall give written notice thereof to each holder
of record of Series A Preferred Units, within five (5)
Business Days following receipt of the Exchange Notice,
by (i) fax, and (ii) registered mail, postage prepaid,
at the address of each such holder set forth in the
records of the Partnership. In such event, each holder
of Series A Preferred Units shall be entitled to
exchange, pursuant to the provision of Section
4.5(g)(ii) a number of Series A Preferred Units which
would comply with the provisions on the ownership
limitation of the General
31
Partner set forth in such Article 5 of the Articles of
Incorporation and any Series A Preferred Units not so
exchanged (the "Excess Units") shall be redeemed by the
Partnership for cash in an amount equal to the original
Capital Contribution per Excess Unit, plus any accrued
and unpaid distributions thereon, whether or not
declared, to the date of redemption. The written notice
of the General Partner shall state (i) the number of
Excess Units held by such holder, (ii) the redemption
price of the Excess Units, (iii) the date on which such
Excess Units shall be redeemed, which date shall be no
later than sixty (60) days following the receipt of the
Exchange Notice, (iv) the place or places where such
Excess Units are to be surrendered for payment of the
Series A Redemption Price, (iv) that distributions on
the Excess Units will cease to accrue on such redemption
date, and (v) that payment of the redemption price will
be made upon presentation and surrender of such Excess
Units. In the event an exchange would result in Excess
Units, as a condition to such exchange, each holder of
such units agrees to provide representations and
covenants reasonably requested by the General Partner
relating to (i) the widely held nature of the interests
in such holder, sufficient to assure the General Partner
that the holder's ownership of stock of the General
Partner (without regard to the limits described above)
will not cause any individual to own in excess of 9.8%
of the stock of the General Partner; and (ii) to the
extent such holder can so represent and covenant without
obtaining information from its owners, the holder's
ownership of tenants of the Partnership and its
affiliates.
(D) The redemption of Series A Preferred
Units described in Section 4.5(g)(i)(B) and (C) shall be
subject to the provisions of Section 4.5(e)(ii)(A) and
Section 4.5(e)(iii)(B); provided, however, that for
purposes hereof the term "Series A Redemption Price" in
Section 4.5(e)(ii)(A) and Section 4.5(e)(iii)(B) shall
be read to mean the original Capital Contribution per
Series A Preferred Unit being redeemed plus all accrued
and unpaid distributions to the redemption date.
(ii) Procedure for Exchange.
(A) Any exchange shall be exercised pursuant
to a notice of exchange (the "Exchange Notice")
delivered to the General Partner by the holder who is
exercising such exchange right, by (i) fax and (ii) by
certified mail postage prepaid. Upon request of the
General Partner, such holder delivering the Exchange
Notice shall provide to the General Partner in writing
such information as the General Partner may reasonably
request to determine whether any portion of the exchange
by the delivering holder will result in the violation of
the restrictions of Article 5 of the Articles of
Incorporation, including the Ownership Limit and the
Related Tenant Limit. The exchange of Series A Preferred
32
Units, or a specified portion thereof, may be effected
after the fifth (5th) Business Days following receipt by
the General Partner of the Exchange Notice and such
requested information by delivering certificates, if
any, representing such Series A Preferred Units to be
exchanged together with, if applicable, written notice
of exchange and a proper assignment of such Series A
Preferred Units to the office of the General Partner
maintained for such purpose. Currently, such office is
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxxx,
Xxxxxxx 00000. Each exchange will be deemed to have been
effected immediately prior to the close of business on
the date on which such Series A Preferred Units to be
exchanged (together with all required documentation)
shall have been surrendered and notice shall have been
received by the General Partner as aforesaid and the
Exchange Price shall have been paid. Any Series A
Preferred Stock issued pursuant to this Section 4.5(g)
shall be delivered as shares which are duly authorized,
validly issued, fully paid and nonassessable, free of
pledge, lien, encumbrance or restriction other than
those provided in the Articles of Incorporation, the
Bylaws of the General Partner, the Securities Act and
relevant state securities or blue sky laws.
(B) In the event of an exchange of Series A
Preferred Units for shares of Series A Preferred Stock,
an amount equal to the accrued and unpaid distributions
which are not paid pursuant to Section 4.5(c)(i) hereof,
whether or not declared, to the date of exchange on any
Series A Preferred Units tendered for exchange shall (i)
accrue and be payable by the General Partner from and
after the date of exchange on the shares of the Series A
Preferred Stock into which such Series A Preferred Units
are exchanged, and (ii) continue to accrue on such
Series A Preferred Units, which shall remain outstanding
following such exchange, with the General Partner as the
holder of such Series A Preferred Units. Notwithstanding
anything to the contrary set forth herein, in no event
shall a holder of a Series A Preferred Unit that was
validly exchanged into Series A Preferred Stock pursuant
to this section (other than the General Partner now
holding such Series A Preferred Unit), receive a
distribution out of Available Cash or Capital
Transaction Proceeds of the Partnership with respect to
any Series A Preferred Units so exchanged.
(C) Fractional shares of Series A Preferred
Stock are not to be issued upon exchange but, in lieu
thereof, the General Partner will pay a cash adjustment
based upon the fair market value of the Series A
Preferred Stock on the day prior to the exchange date as
determined in good faith by the Board of Directors of
the General Partner.
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(iii) Adjustment of Exchange Price.
(A) The Exchange Price is subject to
adjustment upon certain events, including, (i)
subdivisions, combinations and reclassification of the
Series A Preferred Stock, and (ii) distributions to all
holders of Series A Preferred Stock of evidences of
indebtedness of the General Partner or assets (including
securities, but excluding dividends and distributions
paid in cash out of equity applicable to Series A
Preferred Stock).
(B) In case the General Partner shall be a
party to any transaction (including, without limitation,
a merger, consolidation, statutory share exchange,
tender offer for all or substantially all of the General
Partner's capital stock or sale of all or substantially
all of the General Partner's assets), in each case as a
result of which the Series A Preferred Stock will be
converted into the right to receive shares of capital
stock, other securities or other property (including
cash or any combination thereof), each Series A
Preferred Unit will thereafter be exchangeable into the
kind and amount of shares of capital stock and other
securities and property receivable (including cash or
any combination thereof) upon the consummation of such
transaction by a holder of that number of shares of
Series A Preferred Stock or fraction thereof into which
one Series A Preferred Unit was exchangeable immediately
prior to such transaction. The General Partner may not
become a party to any such transaction unless the terms
thereof are consistent with the foregoing.
(h) No Conversion Rights. The holders of the Series A
Preferred Units shall not have any rights to convert such shares into
shares of any other class or series of stock or into any other
securities of, or interest in, the Partnership.
(i) No Sinking Fund. No sinking fund shall be established
for the retirement or redemption of Series A Preferred Units.
Article 5
Distributions
Section 5.1 Requirement and Characterization of Distributions.
(a) Subject to Section 5.1(b), the General Partner shall:
(i) distribute quarterly an amount equal to 100% of
Available Cash generated by the Partnership during such quarter
to the holders of Original Limited Partnership Units, Additional
Units and General Partner Units, pro rata based on the number
of such Units by each; and
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(ii) distribute Capital Transaction Proceeds received
by the Partnership within 30 days after the date of such Capital
Transaction to the holders of Original Limited Partnership
Units, Additional Units and General Partner Units, pro rata
based on the number of such Units held by each.
Notwithstanding the foregoing, if the General Partner holds
Units that mirror outstanding shares of special common stock of the
General Partner and such shares of special common stock bear a
quarterly dividend per share that is different from the cash dividend
on a share of Common Stock, distributions under this Section 5.1(a)
shall be adjusted as appropriate to pay the amounts required with
respect to such Units, but such Units shall not be senior as to the
other Common Units with respect to distributions under this Section
5.1(a).
(b) Anything herein to the contrary notwithstanding, no
Available Cash or Capital Transaction Proceeds shall be distributed
pursuant to Section 5.1 or any other provision of this Article 5 unless
all distributions accumulated on all Series A Preferred Units pursuant
to Section 4.5 have been paid in full and unless all distributions
accumulated on any other outstanding Preferred Units have been paid in
full.
Section 5.2 Amounts Withheld. All amounts withheld pursuant to the
Code or any provisions of any state or local tax law and Section 5.3 hereof with
respect to any allocation, payment or distribution to the General Partner, or
any Limited Partners or Assignees shall be promptly paid, solely out of funds of
the Partnership (except as otherwise provided in Section 5.3 in connection with
the exercise by a Limited Partner of a Redemption Right), by the General Partner
to the appropriate taxing authority and treated as amounts distributed to the
General Partner or such Limited Partners or Assignees pursuant to Section 5.1
for all purposes under this Agreement.
Section 5.3 Withholding. Each Limited Partner hereby authorizes the
Partnership to withhold from or pay on behalf of or with respect to such Limited
Partner any amount of federal, state, local, or foreign taxes that the General
Partner determines that the Partnership is required to withhold or pay with
respect to any amount distributable or allocable to such Limited Partner
pursuant to this Agreement or with respect to the exercise by such Limited
Partner of the Redemption Rights set forth in Section 8.6 or in any separate
agreement, including, without limitation, any taxes required to be withheld or
paid by the Partnership pursuant to Sections 1441, 1442, 1445, or 1446 of the
Code and Section 48-7-129 of the Official Code of Georgia Annotated. Any amount
paid on behalf of or with respect to a Limited Partner shall constitute a loan
by the Partnership to such Limited Partner, which loan shall be repaid by such
Limited Partner within 15 days after notice from the General Partner that such
payment must be made unless (i) the Partnership withholds such payment from a
distribution which would otherwise be made to the Limited Partner or (ii) the
General Partner determines, in its sole and absolute discretion, that such
payment may be satisfied out of the available funds of the Partnership which
would, but for such payment, be distributed to the Limited Partner. Any amounts
withheld pursuant to the foregoing clauses (i) or (ii) shall be treated as
having been distributed to such Limited Partner and shall be promptly paid,
solely
35
out of funds of the Partnership, by the General Partner to the appropriate
taxing authority. Each Limited Partner hereby unconditionally and irrevocably
grants to the Partnership a security interest in such Limited Partner's
Partnership Interest as to secure such Limited Partner's obligation to pay to
the Partnership any amounts required to be paid pursuant to this Section 5.3
(together with attorney's fees and other costs in enforcing the Partnership's
rights against the collateral). In the event that a Limited Partner or Redeeming
Partner fails to pay any amounts owed to the Partnership pursuant to this
Section 5.3 when due, the General Partner may, in its sole and absolute
discretion, elect to make the payment on behalf of such defaulting Partner, and
in such event shall be deemed to have loaned such amount to such defaulting
Partner and shall succeed to all rights and remedies of the Partnership as
against such defaulting Partner (including, without limitation, in the case of a
default by other than a Redeeming Partner the right to receive distributions
from the Partnership). Any amounts payable by a Limited Partner or a Redeeming
Partner hereunder shall bear interest at the Prime Rate, plus two percentage
points (but not higher than the maximum lawful rate) from the date such amount
is due (i.e., 15 days after demand) until such amount is paid in full. In the
event that the Partnership or the General Partner is required to withhold tax
with respect to the exercise by a Limited Partner of a Redemption Right, the
Limited Partner exercising the Redemption Right shall make arrangements with the
Partnership or the General Partner, as the case may be, to provide the funds to
the Partnership necessary to effect the required withholding. In the event that,
pursuant to applicable laws and regulations, the General Partner may withhold a
reduced amount pending a determination by applicable taxing authorities as to
whether any additional withholding tax must subsequently be deposited, the
General Partner shall have the right to require the Redeeming Partner to pledge
a first priority security interest in a portion of the Redemption Amount as
collateral for the Redeeming Partner's obligation to provide the funds necessary
to effect any subsequent required holding (together with attorney's fees and
other costs in enforcing the Partnership's rights against the collateral), in an
amount in the case of a Share Amount equal to Shares having a Value on the date
of the pledge equal to 125% of the maximum possible subsequent required
withholding (or 100% of the maximum possible subsequent required withholding if
the Redemption Amount is paid in the form of the Cash Amount) (the "Withholding
Collateral"). The General Partner shall be entitled to retain possession of the
Withholding Collateral until either the Redeeming Partner provides funds to the
General Partner sufficient to make any subsequent required withholding deposit
or the General Partner receives a determination from the applicable authorities
that no subsequent withholding is required. All dividends, distributions,
interest or other income on the Withholding Collateral while subject to the
pledge hereunder shall be paid to the Redeeming Partner pledging the Withholding
Collateral. If the applicable authorities advise that subsequent withholding is
required and the Redeeming Partner does not deliver the necessary funds to the
General Partner within 20 days after receipt of the General Partner's request
therefor, the General Partner shall be entitled to exercise all rights and
remedies of a secured party under the Uniform Commercial Code with respect to
the Withholding Collateral. Each Limited Partner and each Redeeming Partner
shall take such actions as the Partnership or the General Partner shall request
in order to perfect or enforce the security interest created hereunder.
36
Section 5.4 Distributions Upon Liquidation. Notwithstanding anything
contained in Section 5.1 to the contrary, proceeds from a Liquidating
Transaction shall be distributed to the Partners in accordance with Section
13.2.
Article 6
Allocations
Section 6.1 Allocations of Net Income and Net Loss. For purposes of
maintaining the Capital Accounts and in determining the rights of the Partners
among themselves, the Partnership's Net Income and Net Loss shall be allocated
among the Partners for each taxable year (or portion thereof) as provided herein
below.
(a) Net Income. Net Income for any taxable year (or portion
thereof) shall be allocated, after giving effect to the
special allocations set forth in Section 6.2 below, as
follows:
(i) First, one hundred percent (100%) to the General
Partner in an amount equal to the excess, if any, of (A) the
cumulative Net Losses allocated to the General Partner pursuant
to the last sentence of Section 6.1(b) and Section 6.1(b)(iv)
for all prior fiscal years, over (B) the cumulative Net Income
allocated pursuant to this Section 6.1(a)(i) for all prior
fiscal years;
(ii) Second, one hundred percent (100%) to the Series
A Preferred Partners in an amount equal to the excess, if any,
of (A) the cumulative Net Losses allocated to the Series A
Preferred Partners pursuant to Section 6.1(b)(ii) and Section
6.1(b)(viii) of the Third Amended Agreement for all prior fiscal
years, over (B) the cumulative Net Income allocated pursuant to
this Section 6.1(a)(ii) and Section 6.1(a)(ii) of the Third
Amended Agreement (including any amounts allocated pursuant to
Section 6.2(g) of the Third Amended Agreement which were
attributable to Section 6.1(a)(ii) of the Third Amended
Agreement) for all prior fiscal years;
(iii) Third, one hundred percent (100%) to the holders
of the Common Units in an amount equal to the excess, if any, of
(A) the cumulative Net Losses allocated to such Partners for all
prior fiscal years pursuant to Section 6.1(b)(iii) over (B) the
cumulative Net Income allocated pursuant to this Section
6.1(a)(iii) for all prior fiscal years;
(iv) Fourth, one hundred percent (100%) to the Series
A Preferred Partners until the Series A Preferred Partners have
been allocated an amount equal to the excess of the cumulative
Series A Priority Return through the last day of the current
fiscal year (determined without reduction for distributions made
to date in satisfaction thereof) over the cumulative Net Income
allocated to the Series A Preferred Partners pursuant to this
Section 6.1(a)(iii), and Section 6.1(a)(v) of the Third Amended
Agreement (including any amounts allocated pursuant to Section
6.2(g) of the Third Amended Agreement which were
37
attributable to Section 6.1(a)(v) of the Third Amended
Agreement) for all prior periods; and
(v) Thereafter, to the holders of the Common Units
and the General Partner and any other holders of General Partner
Units, pro rata in accordance with the relative number of Units
held by each; provided, however, if the General Partner holds
Units that mirror outstanding shares of special common stock and
such shares of special common stock bear a quarterly dividend
per share that is different from the cash dividend on a share of
Common Stock, allocations of Net Income under this Section
6.1(a)(v) shall be adjusted as appropriate to allocate amounts
to the General Partner with respect to such Units to mirror the
different quarterly dividend per share.
(b) Net Losses. Net Losses for any taxable year (or portion
thereof) during which Available Cash and Capital Transaction Proceeds
are distributed pursuant to Section 5.1 shall be allocated, after
giving effect to the special allocations set forth in Section 6.2
below, as follows:
(i) First, one hundred percent (100%) to the holders
of the Common Units and the General Partner in proportion to
such Partners' Adjusted Capital Accounts until the Adjusted
Capital Account of each such Partner has been reduced to zero
(for this purpose, any obligation of such Partner to restore a
negative Capital Account under this Agreement or otherwise
recognized under Regulation Section 1.704-1(b)(2)(ii)(c) shall
be disregarded, and any portion of such Capital Account
attributable to Preferred Units by such Partner shall be
disregarded); and
(ii) Second, to the Series A Preferred Partners until
their Adjusted Capital Account balance (determined, solely for
purposes of this Section 6.1(b)(i), without regard to any
obligation of a Partner to restore a negative Capital Account
under Section 13.4, has been reduced to zero); and
(iii) Third, to the holders of the Common Units who
have elected to restore a portion of their negative Capital
Accounts under Section 13.4, in proportion to and to the extent
of such amounts; and
(iv) Thereafter, any remaining Net Loss shall be
allocated to the General Partner.
Notwithstanding the foregoing, Net Losses shall not be allocated to any Limited
Partner pursuant to this Section 6.1(b) to the extent that such allocation would
cause such Limited Partner to have an Adjusted Capital Account Deficit at the
end of such taxable year (or increase any existing Adjusted Capital Account
Deficit). All Net Losses in excess of the limitations set forth in the preceding
sentence of this Section 6.1(b) shall be allocated to the General Partner.
38
(c) Nonrecourse Liabilities. The Partners agree that excess
Nonrecourse Liabilities of the Partnership (within the meaning of
Section 1.752-3(a)(3) of the Regulations) will be allocated among the
Partners for purposes of Section 752 of the Code in accordance with
their respective Percentage Interests.
(d) Gains. Any gain allocated to the Partners upon the sale
or other taxable disposition of any Partnership asset shall to the
extent possible, after taking into account other required allocations
of gain pursuant to Section 6.2 below, be characterized as Recapture
Income in the same proportions and to the same extent as such Partners
have been allocated any deductions directly or indirectly giving rise
to the treatment of such gains as Recapture Income.
Section 6.2 Special Allocation Rules. Notwithstanding any other
provision of this Agreement, the following special allocations shall be made in
the following order:
(a) Minimum Gain Chargeback. Notwithstanding any other
provisions of Article 6, if there is a net decrease in Partnership
Minimum Gain during any Partnership Year, each Partner shall be
specially allocated items of Partnership income and gain for such year
(and, if necessary, subsequent years) in an amount equal to such
Partner's share of the net decrease in Partnership Minimum Gain, as
determined under Regulations Section 1.704-2(g). Allocations pursuant
to the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each Partner pursuant thereto. The
items to be so allocated shall be determined in accordance with
Regulations Section 1.704-2(f)(6). This Section 6.2(a) is intended to
comply with the minimum gain chargeback requirements in Regulations
Section 1.704-2(f) and for purposes of this Section 6.2(a) only, each
Partner's Adjusted Capital Account Deficit shall be determined prior to
any other allocations pursuant to Section 6.1 of the Agreement with
respect to such fiscal year and without regard to any decrease in
Partner Minimum Gain during such Partnership Year.
(b) Partner Minimum Gain Chargeback. Notwithstanding any
other provision of Article 6 (except Section 6.2(a) hereof), if there
is a net decrease in Partner Minimum Gain attributable to a Partner
Nonrecourse Debt during any Partnership Year, each Partner who has a
share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income
and gain for such year (and, if necessary, subsequent years) in an
amount equal to such Partner's share of the net decrease in Partner
Minimum Gain attributable to such Partner Nonrecourse Debt, determined
in accordance with Regulations Section 1.704-2(i)(5). Allocations
pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Partner pursuant
thereto. The items to be so allocated shall be determined in accordance
with Regulations Section 1.704-2(i)(4). This Section 6.2(b) is intended
to comply with the minimum gain chargeback requirement in such Section
of the Regulations and shall be interpreted consistently therewith.
Solely for purposes of this Section 6.2(b), each
39
Partner's Adjusted Capital Account Deficit shall be determined prior to
any other allocations pursuant to Article 6 of this Agreement with
respect to such Partnership Year, other than allocations pursuant to
Section 6.2(a) hereof.
(c) Qualified Income Offset. In the event any Partner
unexpectedly receives any adjustments, allocations or distributions
described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), and after giving
effect to the allocations required under Section 6.2(a) and Section
6.2(b) hereof, such Partner has an Adjusted Capital Account Deficit,
items of Partnership income and gain shall be specially allocated to
such Partner in an amount and manner sufficient to eliminate, to the
extent required by the Regulations, its Adjusted Capital Account
Deficit created by such adjustments, allocations or distributions as
quickly as possible.
(d) Nonrecourse Deductions. Nonrecourse Deductions for any
taxable period shall be allocated to the Partners in accordance with
their respective Percentage Interests.
(e) Partner Nonrecourse Deductions. Any Partner Nonrecourse
Deductions for any Partnership Year shall be specially allocated to the
Partner who bears the economic risk of loss with respect to the Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions are
attributable in accordance with Regulations Section 1.704-2(i)(2).
(f) Code Section 754 Adjustments. To the extent an
adjustment to the adjusted tax basis of any Partnership asset pursuant
to Section 734(b) or 743(b) of the Code is required, pursuant to
Regulations Section 1.704-1(b)(2)(iv)(m), to be taken into account in
determining Capital Accounts, the amount of such adjustment to the
Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases
such basis), and such item of gain or loss shall be specially allocated
to the Partners in a manner consistent with the manner in which their
Capital Accounts are required to be adjusted pursuant to such Section
of the Regulations.
Section 6.3 Allocations for Tax Purposes.
(a) General. Except as otherwise provided in this Section
6.3, for federal income tax purposes, each item of income, gain, loss
and deduction shall be allocated among the Partners in the same manner
as its correlative item of "book" income, gain, loss or deduction is
allocated pursuant to Section 6.1 and Section 6.2 of this Agreement.
(b) Other Allocation Rules.
(i) For purposes of determining Net Income, Net
Losses, or other items allocable to any period, Net Income, Net
Losses, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the
40
General Partner using any permissible method under Section 706
of the Code and the Regulations thereunder.
(ii) In accordance with Code Section 704(c) and the
Regulations thereunder, income, gain, loss and deduction with
respect to any property contributed to the capital of the
Partnership shall, solely for tax purposes, be allocated among
the Partners so as to take account of any variation between the
adjusted basis of such property to the Partnership for federal
income tax purposes and its initial Gross Asset Value.
(iii) To the extent that the fair market value of a
property contributed to the Partnership by Branch Properties,
L.P. differed from its adjusted tax basis at the time it was
originally contributed to Branch Properties, L.P. (the "Original
Book-Tax Disparity"), the allocation of tax items with respect
to such contributed property shall take into account any
remaining Original Book-Tax Disparity at the time such property
is contributed to the Partnership in a manner consistent with
the principles of Section 704(c) of the Code, using the
"traditional method" under Section 1.704-3(b) of the
Regulations, so that the Limited Partners who originally
contributed such property to Branch Properties, L.P. (or their
successors-in-interest) bear the tax burden (or benefit, if
applicable) of the remaining Original Book-Tax Disparity.
(iv) In the event the Gross Asset Value of any
Partnership asset is adjusted, subsequent allocations of income,
gain, loss, and deductions with respect to such asset shall take
account of any variation between the adjusted basis of such
asset for federal income tax purposes and its Gross Asset Value
in the same manner as under Code Section 704(c) and the
Regulations thereunder. Any elections or other decisions
relating to Code Section 704(c) allocations shall be made by the
General Partner; provided, however, that the "traditional
method" of making Section 704(c) allocations without curative
allocations described in Section 1.704-3(b) of the Regulations
shall be used. Allocations pursuant to Sections 6.3(b)(ii),
(iii) and (iv) hereof are solely for purposes of federal, state,
and local taxes and shall not affect, or in any way be taken
into account in computing, any Partner's Capital Account or
share of Net Income, Net Losses, other items, or distributions
pursuant to any provision of this Agreement.
Article 7
Management And Operations Of Business
Section 7.1 Management.
(a) Powers of General Partner. Except as otherwise expressly
provided in this Agreement, all management powers over the business and
affairs of the Partnership are exclusively vested in the General
Partner, and no Limited Partner shall have any
41
right to participate in or exercise control or management power over
the business and affairs of the Partnership. Notwithstanding anything
to the contrary in this Agreement, the General Partner may not be
removed by the Limited Partners with or without cause. In addition to
the powers now or hereafter granted a general partner of a limited
partnership under applicable law or which are granted to the General
Partner under any other provision of this Agreement, the General
Partner shall have full power and authority to do all things deemed
necessary or desirable by it to conduct the business of the
Partnership, to exercise all powers set forth in Section 3.2 hereof and
to effectuate the purposes set forth in Section 3.1 hereof, including,
without limitation:
(i) the making of any expenditures, the lending or
borrowing of money (including, without limitation, borrowing
money to permit the Partnership to make distributions to its
Partners in such amounts as will permit Regency (so long as
Regency desires to qualify as a REIT) to avoid the payment of
any federal income tax (including, for this purpose, any excise
tax pursuant to Section 4981 of the Code) and to make
distributions to its shareholders sufficient to permit Regency
to maintain REIT status), the assumption or guarantee of, or
other contracting for, indebtedness and other liabilities, the
issuance of evidences of indebtedness (including the securing of
same by mortgage, deed of trust or other lien or encumbrance on
the Partnership's assets), the incurring of any obligations it
deems necessary for the conduct of the activities of the
Partnership, and the repayment (including prepayment) of such
indebtedness, liabilities and obligations;
(ii) the making of tax, regulatory and other filings,
or rendering of periodic or other reports to governmental or
other agencies having jurisdiction over the business or assets
of the Partnership;
(iii) the acquisition, disposition, conveyance,
mortgage, pledge, encumbrance, hypothecation or exchange of all
or any assets of the Partnership or the merger or other
combination of the Partnership with or into another entity
(provided that such merger or other combination does not result
in the Partnership recognizing taxable gain or loss for federal
income tax purposes) on such terms as the General Partner deems
proper (subject to Section 7.6 in the case of transactions
between the Partnership and the General Partner or any
Affiliate), and no approval of the Limited Partners shall be
required for the exercise of such powers, provided, however,
that the General Partner shall use reasonable efforts to effect
all dispositions of the Partnership's assets that were
contributed by the Limited Partners in accordance with Section
1031 of the Code although, except as provided in Section 7.1(c)
hereof, it shall not be required to do so;
(iv) the use of the assets of the Partnership
(including, without limitation, cash on hand) for any purpose
consistent with the terms of this Agreement and on any terms it
sees fit, including, without limitation, the
42
financing of the conduct of the operations of the General
Partner, the Partnership or any of the Partnership's
Subsidiaries, the lending of funds to other Persons (including
Regency or any of the Partnership's Subsidiaries) and the
repayment of obligations of the Partnership and its Subsidiaries
and any other Person in which it has an equity investment and
the making of capital contributions to its Subsidiaries, the
holding of any real, personal and mixed property of the
Partnership in the name of the Partnership or in the name of a
nominee or trustee (subject to Section 7.10), the creation, by
grant or otherwise, of easements or servitudes, and the
performance of any and all acts necessary or appropriate to the
operation of the Partnership assets including, but not limited
to, applications for rezoning, objections to rezoning,
constructing, altering, improving, repairing, renovating,
rehabilitating, razing, demolishing or condemning any
improvements or property of the Partnership;
(v) the negotiation, execution, and performance of
any contracts, conveyances or other instruments (including with
Affiliates of the Partnership to the extent provided in Section
7.6) that the General Partner considers useful or necessary to
the conduct of the Partnership's operations or the
implementation of the General Partner's powers under this
Agreement, including, without limitation, the execution and
delivery of a REIT management agreement on behalf of or in the
name of the Partnership providing for the day-to-day management
and operation of the Partnership and including, without
limitation, the execution and delivery of leases on behalf of or
in the name of the Partnership (including the lease of
Partnership property for any purpose and without limit as to the
term thereof, whether or not such term (including renewal terms)
shall extend beyond the date of termination of the Partnership
and whether or not the portion so leased is to be occupied by
the lessee or, in turn, subleased in whole or in part to
others);
(vi) the opening and closing of bank accounts, the
investment of Partnership funds in securities, certificates of
deposit and other instruments, and the distribution of
Partnership cash or other Partnership assets in accordance with
this Agreement;
(vii) the selection and dismissal of employees of the
Partnership or the General Partner (including, without
limitation, employees having titles such as "president," "vice
president," "secretary" and "treasurer"), and the engagement and
dismissal of agents, outside attorneys, accountants, engineers,
appraisers, consultants, contractors and other professionals on
behalf of the General Partner or the Partnership and the
determination of their compensation and other terms of
employment or hiring;
(viii) the maintenance of such insurance for the
benefit of the Partnership and the Partners as it deems
necessary or appropriate;
43
(ix) subject to the provisions of Section 4.2 hereof,
the formation of, or acquisition of an interest in, and the
contribution of property to any further limited or general
partnerships, joint ventures or other relationships that it
deems desirable (including, without limitation, the acquisition
of interests in, and the contribution of property to, its
Subsidiaries and any other Person in which it has an equity
investment from time to time) (provided that such transaction
does not result in the Partnership recognizing taxable gain or
loss for federal income tax purposes);
(x) the control of any matters affecting the rights
and obligations of the Partnership, including the conduct of
litigation and the incurring of legal expense and the settlement
of claims and litigation, the submission of any matter to
arbitration, and the indemnification of any Person against
liabilities and contingencies to the extent permitted by law;
(xi) the undertaking of any action in connection with
the Partnership's direct or indirect investment in its
Subsidiaries or any other Person (including, without limitation,
the contribution or loan of funds by the Partnership to such
Persons) (provided that such action does not result in the
Partnership recognizing taxable gain or loss for federal income
tax purposes);
(xii) the distribution in kind of the Briarcliff
Village property pursuant to Section 13.2(c);
(xiii) the determination of the fair market value of
any Partnership property distributed in kind using such
reasonable method of valuation as it may adopt; and
(xiv) the execution, acknowledgment and delivery of
any and all documents and instruments to effectuate any or all
of the foregoing.
(b) No Approval Required for Above Powers. Subject to any
other restriction set forth in this Agreement, each of the Limited
Partners agrees that the General Partner is authorized to execute,
deliver and perform the above-mentioned agreements and transactions on
behalf of the Partnership without any further act, approval or vote of
the Partners, notwithstanding any other provision of this Agreement
(except where the Consent of the Limited Partners or the consent of the
Series A Preferred Partners or of any other class or series of
Partnership Interests is expressly required herein), the Act or any
applicable law, rule or regulation. The execution, delivery or
performance by the General Partner or the Partnership of any agreement
authorized or permitted under this Agreement shall not constitute a
breach by the General Partner of any duty that the General Partner may
owe the Partnership or the Limited Partners or any other Persons under
this Agreement or of any duty stated or implied by law or equity.
44
(c) Approval of Sale of Briarcliff Village. Except pursuant
to the dissolution and liquidation of the Partnership in accordance
with Article 13 hereof, the property commonly known as Briarcliff
Village (the "Briarcliff Village Property") shall not be sold by the
Partnership or the General Partner on or before December 19, 2005
(other than in a transaction in which the Partnership recognizes no
taxable gain or loss for federal income purposes) without the approval
of a Majority-in-Interest of the Original Briarcliff Partners (as
defined below) who continue, as of such time, to hold Original Limited
Partnership Units attributable to the contribution of the Briarcliff
Village Property to Branch Properties, L.P. and Branch Properties,
L.P.'s subsequent contribution of the Briarcliff Village Property to
the Partnership (the "Original Briarcliff Partners"). Such approval
right of the Original Briarcliff Partners is personal to the Original
Briarcliff Partners and shall terminate upon the death of an Original
Briarcliff Partner or a sale, assignment, conveyance, or other transfer
by an Original Briarcliff Partner, with respect to that Partner's
Original Limited Partnership Units, and shall not be exercisable by any
successor, transferee or assignee of an Original Briarcliff Partner. In
the event of a like-kind exchange involving the Briarcliff Village
Property by the Partnership, then such approval right for the benefit
of the Original Briarcliff Partners will continue to be enforceable
after such like-kind exchange, but shall relate to the property
(whether real, personal or mixed, tangible or intangible) acquired by
the Partnership in such like-kind exchange. Nothing herein shall be
deemed to require that the Partnership or the General Partner take any
action to avoid or prevent an involuntary disposition of all or part of
said Briarcliff Village pursuant to a condemnation proceeding or other
taking. For purposes of this Section 7.1(c), Majority-In-Interest of
the Original Briarcliff Partners shall mean the Original Briarcliff
Partners who hold, in the aggregate, more than fifty percent (50%) of
the Percentage Interests then allocable to and held by all of the
Original Briarcliff Partners with respect to the Original Limited
Partnership Units received by the Original Briarcliff Partners as a
result of the contribution of the Briarcliff Village Property to Branch
Properties, L.P. and Branch Properties, L.P.'s subsequent contribution
of the Briarcliff Village Property to the Partnership. The Partnership
shall not engage in any merger, consolidation or other business
combination with or into another Person unless the Partnership has
entered into an agreement with such Person in which such Person
expressly agrees to be bound by the provisions of this Section 7.1(c).
(d) Insurance. At all times from and after the date hereof,
the General Partner may cause the Partnership to obtain and maintain
casualty, liability and other insurance on the properties of the
Partnership and liability insurance for the Indemnitees hereunder.
(e) Working Capital and Other Reserves. At all times from
and after the date hereof, the General Partner may cause the
Partnership to establish and maintain working capital reserves in such
amounts as the General Partner, in its sole and absolute discretion,
deems appropriate and reasonable from time to time. Subject to the
proviso in the last part of Section 3.1, the General Partner also may
cause the Partnership to establish reserves out of cash flow not
constituting Capital Transaction
45
Proceeds as well as out of Capital Transaction Proceeds for the purpose
of purchasing, improving or expanding Partnership property.
(f) No Obligation to Consider Tax Consequences to Limited
Partners. Except as provided in Section 7.1(c) and Section 13.2(c) with
respect to Briarcliff Village, except as provided in Section 7.1(g)
with respect to the sale of the Management Business, and except for the
obligation of the General Partner set forth in Section 7.1(a)(iii) to
use reasonable efforts to effect all dispositions of the Partnership's
assets that were contributed by the Limited Partners in accordance with
Section 1031 of the Code, (i) in exercising its authority under this
Agreement, the General Partner may, but shall be under no obligation
to, take into account the tax consequences to any Partner of any action
taken by it, and (ii) the General Partner and the Partnership shall not
have liability to a Limited Partner under any circumstances as a result
of an income tax liability incurred by such Limited Partner as a result
of an action (or inaction) by the General Partner pursuant to its
authority under this Agreement.
(g) Approval of Sale of Management Business. Notwithstanding
anything contained herein to the contrary, the Third Party Management
Business (as defined in the Contribution Agreement) contributed by
Branch Properties, L.P. to the Partnership as part of its initial
Capital Contribution (the "Management Business") shall not be sold by
the Partnership on or before the tenth (10th) anniversary of the First
Closing (other than in a transaction in which the Partnership
recognizes no taxable gain or loss for federal income tax purposes);
provided, however, that the Partnership shall be permitted to undertake
the following transactions: (i) contribution of the Management Business
to a corporation (the "New Management Company") in which the
Partnership owns five percent (5%) of the issued and outstanding voting
common stock and 100% of the issued and outstanding non-voting
preferred stock and in which The Regency Group, Inc., a Florida
corporation, owns ninety-five percent (95%) of the issued and
outstanding voting common stock and in which no other shares of stock
are issued and outstanding following the contribution; (ii) a
distribution by the Partnership of part or all of the stock of the New
Management Company to the General Partner on or after the fifth (5th)
anniversary of the First Closing; or (iii) a sale of part or all of the
stock of the New Management Company if no Original Limited Partners
hold Units which they received on the date of this Agreement or any
Additional Units received by them subsequent to the date of this
Agreement, or with the unanimous written consent of the Original
Limited Partners then holding such Units).
Section 7.2 Certificate of Limited Partnership. To the extent that
such action is determined by the General Partner to be reasonable and necessary
or appropriate, the General Partner shall file amendments to and restatements of
the Certificate and do all the things to maintain the Partnership as a limited
partnership (or a partnership in which the limited partners have limited
liability) under the laws of the State of Delaware and each other jurisdiction
in which the Partnership may elect to do business or own property. Subject to
the terms of Section 8.5(a)(iv) hereof, the General Partner shall not be
required, before or after filing, to deliver or mail a copy of the Certificate
or any amendment thereto to any Limited Partner.
46
The General Partner shall use all reasonable efforts to cause to be filed such
other certificates or documents as may be reasonable and necessary or
appropriate for the formation, continuation, qualification and operation of a
limited partnership (or a partnership in which the Limited Partners have limited
liability) in the State of Delaware and any other jurisdiction in which the
Partnership may elect to do business or own property.
Section 7.3 Restriction on General Partner's Authority. Without the
consent of all the Limited Partners, the General Partner may not:
(a) Take any action that would make it impossible to carry
on the ordinary business of the Partnership, except as otherwise
provided in this Agreement;
(b) Possess Partnership property for other than a
Partnership purpose;
(c) Admit a Person as a Partner, except as otherwise
provided in this Agreement; or
(d) Perform any act that would subject a Limited Partner to
liability as a general partner.
Section 7.4 Responsibility for Expenses.
(a) No Compensation. Except as provided in this Section 7.4
and elsewhere in this Agreement (including the provisions of Article 5
and Article 6 regarding distributions, payments, and allocations to
which it may be entitled), the General Partner shall not be compensated
for its services as general partner of the Partnership.
(b) Responsibility for Ownership and Operation Expenses.
The Partnership shall be responsible for and shall pay all expenses
relating to the Partnership's ownership of its assets, and the
operation of, or for the benefit of, the Partnership, and the General
Partner shall be reimbursed on a monthly basis, or such other basis as
the General Partner may determine in its sole and absolute discretion,
for all expenses it incurs relating to the Partnership's ownership of
its assets and the operation of, or for the benefit of, the
Partnership. Such reimbursements shall be in addition to any
reimbursement to the General Partner pursuant to Section 10.3(c) and as
a result of indemnification pursuant to Section 7.7. The General
Partner shall determine in good faith the amount of expenses incurred
by it relating to the operation of, or that inure to the benefit of,
the Partnership. In the event that certain expenses are incurred for
the benefit of the Partnership and other Persons (including the General
Partner), such expenses will be allocated to the Partnership and such
other Persons in such a manner as the General Partner deems fair and
reasonable.
(c) Responsibility for Organizational Expenses. The
Partnership shall be responsible for and shall pay all expenses
incurred relating to the organization of the Partnership.
47
(d) Partnership Interest Issuance Expenses. The General
Partner shall be reimbursed for all expenses it incurs relating to any
issuance of additional Partnership Interests pursuant to Section 4.2 or
Section 4.5 hereof, all of which shall be expenses of the Partnership.
(e) Other Expenses. The Partnership agrees to pay, as costs
and expenses of the Partnership, any reasonable costs and expenses
reasonably incurred by the General Partner which do not specifically
relate to the Partnership's operations but are necessary or desirable
in connection with the General Partner's business or for the benefit of
the General Partner's shareholders, including expenses of employees of
the General Partner that are not specifically allocable to services
provided to the Partnership, directors' fees paid by the General
Partner, the costs of complying with applicable statutes and
regulations (including preparing and filing periodic reports with the
Securities and Exchange Commission) and costs and expenses incurred in
issuing or redeeming shares of the General Partner where the proceeds
of such shares have been contributed to the Partnership. The Limited
Partners expressly acknowledge that the Limited Partners will benefit
by reason of the distribution provisions of Section 5.1, and that the
Limited Partners therefore will benefit indirectly from the Partnership
paying such expenses.
Section 7.5 Outside Activities of the General Partner. The General
Partner shall not directly, or indirectly through any Affiliate, enter into,
engage in or conduct any activity or performing for a fee any service including
(without limiting the generality of the foregoing) engaging in any business
dealing with real property of any type or location, except through or for the
account of the Partnership; provided, however, that to the extent required by
the then current federal income tax law or determined by the General Partner to
be in the best interest of its shareholders under the then current federal
income tax law, the General Partner or any of its Affiliates may hold stock or
other interests in Regency Realty Group, Inc. or its successors.
Section 7.6 Contracts with Affiliates.
(a) General. The General Partner or any of its Affiliates
may enter into transactions or agreements with the Partnership,
including transactions and agreements (i) to sell, transfer or convey
any property to, or purchase any property from, the Partnership,
directly or indirectly, or (ii) for the provision of services to the
Partnership, provided that such transactions or agreements, including
transactions and agreements with Security Capital Investment Research,
Inc. or any of its Affiliates, are on terms that are fair and
reasonable and no less favorable to the Partnership than would be
obtained from an unaffiliated third party in connection therewith. In
entering into such transactions with Affiliates the General Partner
shall not allocate expenses and similar items disproportionately
between the General Partner and the Partnership.
(b) Employee Benefit Plans. The General Partner may propose
and adopt on behalf of the Partnership employee benefit plans funded by
the Partnership for the benefit of employees of the General Partner,
the Partnership, Subsidiaries of the
48
Partnership or any Affiliate of any of them in respect of services
performed, directly or indirectly, for the benefit of the Partnership,
the General Partner, or any of the Partnership's Subsidiaries.
(c) Conflict Avoidance Agreements. The General Partner is
expressly authorized to enter into, in the name and on behalf of the
Partnership, a right of first opportunity arrangement and other
conflict avoidance agreements with various Affiliates of the
Partnership and the General Partner, on such terms as the General
Partner believes are advisable, subject to the provisions of Section
7.6(a) hereof.
Section 7.7 Indemnification.
(a) General. The Partnership shall indemnify an Indemnitee
from and against any and all losses, claims, damages, liabilities,
joint or several, expenses (including legal fees and expenses),
judgments, fines, settlements, and other amounts arising from any and
all claims, demands, actions, suits or proceedings, civil, criminal,
administrative or investigative, that relate to the operations of the
Partnership as set forth in this Agreement in which any Indemnitee may
be involved, or is threatened to be involved, as a party or otherwise,
unless it is established that: (i) the act or omission of the
Indemnitee was material to the matter giving rise to the proceeding and
constituted willful misconduct or fraud; (ii) the Indemnitee actually
received an improper personal benefit in money, property or services;
or (iii) in the case of any criminal proceeding, the Indemnitee had
reasonable cause to believe that the act or omission was unlawful. The
termination of any proceeding by judgment, order or settlement does not
create a presumption that the Indemnitee did not meet the requisite
standard of conduct set forth in this Section 7.7(a). The termination
of any proceeding by conviction or upon a plea of nolo contendere or
its equivalent, or an entry of an order of probation prior to judgment,
creates a rebuttable presumption that the Indemnitee acted in a manner
contrary to that specified in this Section 7.7(a). Any indemnification
pursuant to this Section 7.7 shall be made only out of the assets of
the Partnership.
(b) Advancement of Expenses. Reasonable expenses incurred by
an Indemnitee who is, or is threatened to be made, a party to a
proceeding may be paid or reimbursed by the Partnership in advance of
the final disposition of the proceeding upon receipt by the Partnership
of (i) a written affirmation by the Indemnitee of the Indemnitee's good
faith belief that the standard of conduct necessary for indemnification
by the Partnership as authorized in this Section 7.7 has been met and
(ii) a written undertaking by or on behalf of the Indemnitee to repay
the amount if it shall ultimately be determined that the standard of
conduct has not been met.
(c) No Limitation of Rights. The indemnification provided by
this Section 7.7 shall be in addition to any other rights to which an
Indemnitee or any other Person may be entitled under any agreement,
pursuant to any vote of the Partners, as a matter
49
of law or otherwise, and shall continue as to an Indemnitee who has
ceased to serve in such capacity.
(d) Insurance. The Partnership may purchase and maintain
insurance, on behalf of the Indemnitees and such other Persons as the
General Partner shall determine, against any liability that may be
asserted against or expenses that may be incurred by such Person in
connection with the Partnership's activities, regardless of whether the
Partnership would have the power to indemnify such Person against such
liability under the provisions of this Agreement.
(e) No Personal Liability for Partners. In no event may an
Indemnitee subject any Partner to personal liability by reason of the
indemnification provisions set forth in this Agreement.
(f) Interested Transactions. An Indemnitee shall not be
denied indemnification in whole or in part under this Section 7.7
because the Indemnitee had an interest in the transaction with respect
to which the indemnification applies if the transaction was otherwise
permitted by the terms of this Agreement.
(g) Benefit. The provisions of this Section 7.7 are for the
benefit of the Indemnitees, their heirs, successors, assigns and
administrators and shall not be deemed to create any rights for the
benefit of any other Persons.
Section 7.8 Liability of the General Partner.
(a) General. Notwithstanding anything to the contrary set
forth in this Agreement, the General Partner shall not be liable for
monetary damages to the Partnership, any Partners or any Assignees for
losses sustained or liabilities incurred as a result of errors in
judgment or of any act or omission if the General Partner acted in good
faith.
(b) No Obligation to Consider Interests of Limited Partners.
The Limited Partners expressly acknowledge that the General Partner is
acting on behalf of the Partnership, the General Partner and Regency's
shareholders collectively, that except as provided in Section 7.1(e)
with respect to the establishment and maintenance of working capital
reserves, except as provided in Section 7.1(f) with respect to tax
consequences, except as expressly provided otherwise in Section
7.1(a)(iv), Section 7.1(a)(ix) and Section 7.1(a)(xi) with respect to
the powers of the General Partner, the General Partner is under no
obligation to consider the separate interests of the Limited Partners
(including, without limitation, the tax consequences to Limited
Partners or Assignees except as expressly provided otherwise in Section
7.1(f)) in deciding whether to cause the Partnership to take (or
decline to take) any actions which the General Partner has undertaken
in good faith on behalf of the Partnership, and that the General
Partner shall not be liable for monetary damages for losses sustained,
liabilities incurred, or benefits not derived by Limited Partners in
connection with such decisions, provided that the General Partner has
acted in good faith and in accordance with the
50
provisions of this Agreement. For purposes hereof, a Person acting in a
manner which furthers compliance by Regency with the REIT requirements
of the Code, shall be deemed to satisfy the standards of conduct
hereunder. The Limited Partners further expressly acknowledge that
Regency is obligated to cause the Partnership to take (or decline to
take) certain actions in order to assist Security Capital and its
Affiliates in avoiding classification as a passive foreign investment
company within the meaning of Section 1296 of the Code. Such obligation
is set forth on Schedule 7.8(b).
(c) Acts of Agents. Subject to its obligations and duties as
General Partner set forth in Section 7.1(a) hereof, the General Partner
may exercise any of the powers granted to it by this Agreement and
perform any of the duties imposed upon it hereunder either directly or
by or through its agents. The General Partner shall not be responsible
for any misconduct or negligence on the part of any such agent
appointed by it in good faith.
(d) Effect of Amendment. Any amendment, modification or
repeal of this Section 7.8 or any provision hereof shall be prospective
only and shall not in any way affect the limitations on the General
Partner's liability to the Partnership and the Limited Partners under
this Section 7.8 as in effect immediately prior to such amendment,
modification or repeal with respect to claims arising from or relating
to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise or be
asserted.
Section 7.9 Other Matters Concerning the General Partner.
(a) Reliance on Documents. The General Partner may rely and
shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture, or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties.
(b) Reliance on Consultants and Advisers. The General
Partner may consult with legal counsel, accountants, appraisers,
management consultants, investment bankers and other consultants and
advisers selected by it, and any act taken or omitted to be taken in
reliance upon and in accordance with the opinion of such Persons as to
matters which such General Partner reasonably believes to be within
such Person's professional or expert competence shall be conclusively
presumed to have been done or omitted in good faith and in accordance
with such opinion.
(c) Action Through Officers and Attorneys. The General
Partner shall have the right, in respect of any of its powers or
obligations hereunder, to act through any of its duly authorized
officers and a duly appointed attorney or attorneys-in-fact. Each such
attorney shall, to the extent provided by the General Partner in the
power of attorney, have full power and authority to do and perform all
and every act and duty which is permitted or required to be done by the
General Partner hereunder.
51
(d) Actions to Maintain REIT Status or Avoid Taxation of the
General Partner. Notwithstanding any other provisions of this Agreement
or the Act, any action of the General Partner on behalf of the
Partnership or any decision of the General Partner to refrain from
acting on behalf of the Partnership, undertaken in the good faith
belief that such action or omission is necessary or advisable in order
(i) to protect the ability of Regency to continue to qualify as a REIT
or (ii) to avoid Regency incurring any taxes under Section 857 or
Section 4981 of the Code, is expressly authorized under this Agreement
and is deemed approved by all of the Limited Partners.
Section 7.10 Title to Partnership Assets. Title to Partnership
assets, whether real, personal or mixed and whether tangible or intangible,
shall be deemed to be owned by the Partnership as an entity, and no Partner,
individually or collectively, shall have any ownership interest in such
Partnership assets or any portion thereof. Title to any or all of the
Partnership assets may be held in the name of the Partnership, the General
Partner or one or more nominees, as the General Partner may determine, including
Affiliates of the General Partner. The General Partner hereby declares and
warrants that any Partnership assets for which legal title is held in the name
of the General Partner or any nominee or Affiliate of the General Partner shall
be held by the General Partner for the use and benefit of the Partnership in
accordance with the provisions of this Agreement and any separate nominee
agreement; provided, however, that the General Partner shall use its reasonable
best efforts to cause beneficial and record title to such assets to be vested in
the Partnership as soon as reasonably practicable in light of all the facts and
circumstances, including, but not limited to, third party consents and transfer
taxes. All Partnership assets shall be recorded as the property of the
Partnership in its books and records, irrespective of the name in which legal
title to such Partnership assets is held.
Section 7.11 Reliance by Third Parties. Notwithstanding anything to
the contrary in this Agreement, any Person dealing with the Partnership shall be
entitled to assume that the General Partner has full power and authority to
encumber, sell or otherwise use in any manner any and all assets of the
Partnership and to enter into any contracts on behalf of the Partnership, and
such Person shall be entitled to deal with the General Partner as if it were the
Partnership's sole party in interest, both legally and beneficially. Each
Limited Partner hereby waives any and all defenses or other remedies which may
be available against such Person to contest, negate or disaffirm any action of
the General Partner in connection with any such dealing. In no event shall any
Person dealing with the General Partner or its representatives be obligated to
ascertain that the terms of this Agreement have been complied with or to inquire
into the necessity or expedience of any act or action of the General Partner or
its representatives. Each and every certificate, document or other instrument
executed on behalf of the Partnership by the General Partner or its
representatives shall be conclusive evidence in favor of any and every Person
relying thereon or claiming thereunder that (i) at the time of the execution and
delivery of such certificate, document or instrument, this Agreement was in full
force and effect, (ii) the Person executing and delivering such certificate,
document or instrument was duly authorized and empowered to do so for and on
behalf of the Partnership and (iii) such certificate, document or instrument was
duly executed and delivered in
52
accordance with the terms and provisions of this Agreement and is binding upon
the Partnership.
Section 7.12 Redemption of Units Held by General Partner. Whenever
the General Partner redeems any of its shares, the Partnership (i) shall redeem
a matching number of Units (after giving effect to the Unit Adjustment Factor)
of the same type at the same redemption price as that paid by the General
Partner so as to preserve the one-to-one equivalency (after giving effect to the
Unit Adjustment Factor) between outstanding shares of the General Partner and
Units held by the General Partner, and (ii) the Partnership shall reimburse the
General Partner for all costs incurred in connection with the share redemption,
which shall be expenses of the Partnership.
Article 8
Rights And Obligations Of Limited Partners
Section 8.1 Limitation of Liability. The Limited Partners shall have
no liability under this Agreement except as expressly provided in Section 5.3
hereof, or under the Act.
Section 8.2 Management of Business. No Limited Partner or Assignee
(other than the General Partner, any of its Affiliates or any officer, director,
employee, partner, agent or trustee of the General Partner, the Partnership or
any of their Affiliates, in their capacity as such) shall take part in the
operation, management or control (within the meaning of the Act) of the
Partnership's business, transact any business in the Partnership's name or have
the power to sign documents for or otherwise bind the Partnership. The
transaction of any such business by the General Partner, any of its Affiliates
or any officer, director, employee, partner, agent or trustee of the General
Partner, the Partnership or any of their Affiliates, in their capacity as such,
shall not affect, impair or eliminate the limitations on the liability of the
Limited Partners or Assignees under this Agreement.
Section 8.3 Outside Activities of Limited Partners. Subject to any
agreements entered into by a Limited Partner or its Affiliates with the General
Partner, the Partnership or a Subsidiary or an Affiliate of any of them, the
following rights shall govern outside activities of Limited Partners: (i) any
Limited Partner and any officer, director, employee, agent, trustee, Affiliate,
partner, beneficiary or shareholder of any such Limited Partner shall be
entitled to and may have business interests and engage in business activities in
addition to those relating to the Partnership, including business interests and
activities in direct competition with the Partnership, the General Partner or
their Affiliates; (ii) neither the Partnership nor any Partners shall have any
rights by virtue of this Agreement in any business ventures of any Partner or
Assignee; (iii) none of the Partners nor any other Person shall have any rights
by virtue of this Agreement or the partnership relationship established hereby
in any business ventures of any other Person, and such Person shall have no
obligation pursuant to this Agreement to offer any interest in any such business
ventures to the Partnership, any Partner or any such other Person, even if such
opportunity is of a character which, if presented to the Partnership, any
Partner or such other Person, could be taken by such Person; (iv) the fact that
a Partner may encounter opportunities to purchase, otherwise acquire, lease,
sell or otherwise
53
dispose of real or personal property and may take advantage of such
opportunities himself or introduce such opportunities to entities in which
it has or has not any interest, shall not subject such Partner to liability to
the Partnership or any of the other Partners on account of the lost opportunity;
and (v) except as otherwise specifically provided herein, nothing contained in
this Agreement shall be deemed to prohibit a Partner or any Affiliate of a
Partner from dealing, or otherwise engaging in business, with Persons
transacting business with the Partnership or from providing services relating to
the purchase, sale, rental, management or operation of real or personal property
(including real estate brokerage services) and receiving compensation therefor,
from any Persons who have transacted business with the Partnership or other
third parties.
Section 8.4 Priority Among Partners. Except to the extent provided
by Section 4.2, Section 4.5, Section 5.1(b), Section 6.2 or Section 6.3 hereof,
or except as otherwise expressly provided in this Agreement, no Partner (Limited
or General) or Assignee shall have priority over any other Partner (Limited or
General) or Assignee either as to the return of Capital Contributions or as to
profits, losses or distributions.
Section 8.5 Rights of Limited Partners Relating to the Partnership.
(a) Copies of Business Records. In addition to other rights
provided by this Agreement or by the Act, and except as limited by
Section 8.5(c) hereof, each Limited Partner shall be provided the
following without demand, except as otherwise provided below, at the
Partnership's expense:
(i) promptly after becoming available, a copy of the
most recent annual, quarterly and current reports and proxy
statements filed with the Securities and Exchange Commission by
Regency pursuant to the Securities Exchange Act of 1934, if any;
(ii) promptly after becoming available, a copy of the
Partnership's federal, state and local income tax returns for
each Partnership Year;
(iii) upon written demand and for a purpose reasonably
related to such Limited Partner's interest as a Limited Partner
in the Partnership, a current list of the name and last known
business, residence or mailing address of each Partner;
(iv) a copy of this Agreement and (upon written
demand) the Certificate and all amendments hereto or (upon
written demand) to the Certificate, together with executed
copies of all powers of attorney pursuant to which this
Agreement, the Certificate and all amendments hereto and thereto
have been executed; and
(v) upon written demand, true and full information
regarding the amount of cash and a description and statement of
any other property or services
54
contributed by each Partner and which each Partner has agreed to
contribute in the future, and the date on which each became a
Partner.
(b) Notification of Changes in Unit Adjustment Factor. The
General Partner shall notify each Limited Partner (other than any
Partner who does not have a Redemption Right) in writing of any change
made to the Unit Adjustment Factor within 10 Business Days of the date
such change becomes effective.
(c) Confidential Information. Notwithstanding any other
provision of this Section 8.5, the General Partner may keep
confidential from the Limited Partners, for such period of time as the
General Partner determines in its discretion to be reasonable, any
information (i) relating to the General Partner or any of its
Affiliates or the conduct of their business that the General Partner
believes, in its good faith judgment, the disclosure of which
information would adversely affect a material financing, acquisition,
disposition of assets or securities or other comparable transaction to
which the General Partner or any of its Affiliates is a party, (ii)
that the General Partner believes to be in the nature of trade secrets
of Regency or its Affiliates or (iii) that the Partnership, Regency or
any of their Affiliates is required by law or by agreements with
unaffiliated third parties to keep confidential. Nothing contained in
this Section 8.5(c) shall permit the General Partner to keep
confidential from the Limited Partners any information relating to the
Partnership or its business.
Section 8.6 Redemption of Units. The Redemption Rights of the
Original Limited Partners are set forth in this Section 8.6. Any Redemption
Rights granted to Additional Limited Partners shall be set forth in amendments
to this Agreement or in separate redemption agreements.
(a) Exercise. Subject to the provisions of this Section 8.6,
the Original Limited Partners shall have the right (the "Redemption
Right") to require the Partnership to redeem any Unit held by such
Original Limited Partner in exchange for the Redemption Amount to be
paid by the Partnership. A Redemption Right shall be exercised pursuant
to a Notice of Redemption delivered to the General Partner by the
Original Limited Partner who is exercising the Redemption Right (the
"Redeeming Partner"), which shall be irrevocable except as set forth in
this Section 8.6(a). The redemption shall occur on the Specified
Redemption Date; provided, however, a Specified Redemption Date shall
not occur until such later date as may be specified pursuant to any
agreement with an Original Limited Partner. An Original Limited Partner
may exercise a Redemption Right any time and any number of times. A
Redeeming Partner may not exercise the Redemption Right for less than
1,000 Units or, if such Redeeming Partner holds less than 1,000 Units,
all of the Units held by such Redeeming Partner. If (i) an Original
Limited Partner acquires any Units after the First Closing from another
Original Limited Partner or holds or acquires any Shares otherwise than
pursuant to the exercise of a Redemption Right hereunder and (ii) the
issuance of a Share Amount pursuant to the exercise of a Redemption
Right would violate the provisions of Section 5.2 of the Articles of
Incorporation as a result of the
55
ownership of such Shares so acquired by such Original Limited Partner
(the number of Shares in excess of the number of Shares permitted
pursuant to said Section 5.2 is herein referred to as the "Excess
Shares") and (iii) such Original Limited Partner does not revoke or
amend the exercise of such Redemption Right to comply with the
provisions of said Section 5.2 of the Articles of Incorporation within
five days after receipt of written notice from the General Partner that
the redemption would be in violation thereof, then the Partnership
shall pay to such Redeeming Partner, in lieu of the Share Amount or the
Cash Amount attributable to the Excess Shares, the amount which would
be payable to such Redeeming Partner pursuant to Section 5.3 of the
Articles of Incorporation if such Excess Shares were issued in
violation of Section 5.2 of the Articles of Incorporation and Regency
exercised the remedies pursuant to said Section 5.3 of the Articles of
Incorporation. The relevant provisions of the Articles of Incorporation
as presently in effect are attached hereto as Section 8.6(a). This
Section 8.6(a) shall in no way or manner be construed as limiting the
application of the Articles of Incorporation or constitute any form of
waiver or exemption thereunder.
(b) Payment. The General Partner shall have the right to
elect to fund the Redemption Amount through the issuance of (i) the
Share Amount or (ii) the Cash Amount The Redeeming Partner shall have
no right, with respect to any Unit so redeemed, to receive any
distributions paid by the Partnership after the Specified Redemption
Date.
(c) Exceptions for Payment. Notwithstanding anything
contained in this Section 8.6 to the contrary, the following provisions
shall apply with respect to the payment of a Redemption Amount:
(i) If the funding of the Share Amount with respect to
the exercise of a Redemption Right would cause the issuance of
the Shares in connection therewith to violate Article 5.14 of
the Articles of Incorporation of Regency, then the Redeeming
Partner shall not have the right to receive the Share Amount
with respect to the issuance of any Shares resulting in such a
violation, and the balance of any Redemption Amount relating to
the exercise of such Redemption Right shall be paid by a Cash
Amount. A Non-U.S. Person who (i) has signed a Waiver and
Consent Agreement in the form of Exhibit C attached hereto for
the benefit of Regency and Security Capital (the "Security
Capital Waiver and Consent") and (ii) is exercising a Redemption
Right (and will receive a Share Amount) in compliance with the
Security Capital Waiver and Consent, will not be in violation of
the provisions of Article 5.14 of the Articles of Incorporation
if (x) the aggregate number of Shares to be issued on such
Specified Redemption Date to all Redeeming Partners who are
Non-U.S. Persons is equal to or less than (y) the aggregate
number of Shares to be issued on such Specified Redemption Date
to all Redeeming Partners who are other than Non-U.S. Persons
(the maximum number of Shares which may be issued to Redeeming
Partners on a Specified Redemption Date who are Non-U.S. Persons
in order to satisfy the foregoing requirement is herein referred
to as the "Matching Share
56
Amount"). If more than one Redeeming Partner who is a Non-U.S.
Person exercises a Redemption Right for the same Specified
Redemption Date and if the aggregate Share Amount payable to all
such Redeeming Partners would cause the issuance of Shares to
such Non-U.S. Persons to exceed the Matching Share Amount on
such Specified Redemption Date, then the Matching Share Amount
shall be allocated among such Redeeming Partners who are
Non-U.S. Persons pro rata in proportion to the respective Share
Amounts otherwise payable to such Redeeming Partners, and any
balance of a Redemption Amount payable to any such Redeeming
Partner on such Specified Redemption Date shall be paid by a
Cash Amount.
(ii) If the issuance of Shares for a Share Amount to
a Redeeming Partner would be in violation of the Securities Act
and applicable state securities laws then such Redeeming Partner
shall not have the right to receive the Share Amount, and the
Redemption Amount shall be paid by the Cash Amount; provided,
however, the issuance of Shares for a Share Amount shall not
violate the registration requirements of the Securities Act as
in effect on the date hereof if such Shares are issued to an
"accredited investor" as defined in the Securities Act.
(d) [Intentionally omitted.]
(e) Conditions. As a condition to exercising a Redemption
Right, each Redeeming Partner shall execute a Notice of Redemption in
the form attached as Exhibit B and, if a Non-U.S. Person, the Security
Capital Waiver and Consent in the form attached as Exhibit C; and
execute such other documents and take such other actions as the General
Partner may reasonably require, including a Foreign Investment and Real
Property Tax Act ("FIRPTA") or similar state and/or local affidavit (or
make appropriate arrangements for deposit with the General Partner for
payment to the Internal Revenue Service or any state or local
governmental authority of the amount required for the General Partner
to comply with the withholding provisions of such federal, state and
local laws, and if applicable, providing a withholding certificate
evidencing the Redeeming Partner's right to a reduced rate of FIRPTA
withholding). As a further condition to exercising a Redemption Right,
the Units to be redeemed shall be delivered to the Partnership or
Regency, as the case may be, free and clear of all liens, security
interests, deeds of trust, pledges and other encumbrances of any nature
whatsoever (collectively the "Liens"), subject to the provisions of
Section 5.3 hereof. In the event any Lien exists on the Specified
Redemption Date with respect to the Units to be redeemed, neither the
Partnership nor Regency (if Regency assumes the Redemption Right
pursuant to Section 8.7) shall have any obligation to redeem such
Units, unless, in connection therewith, the General Partner has elected
to pay a portion of the Redemption Amount in cash and such cash is
sufficient to discharge such Lien, subject to the provisions of Section
5.3 hereof. Each Redeeming Partner hereby expressly authorizes the
General Partner to apply such portion of such cash as may be necessary
to discharge such Lien in full.
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(f) [Intentionally Omitted.]
(g) Regency Agreement. Regency agrees (i) to perform
Regency's obligations described in this Section 8.6, (ii) to cause the
General Partner to perform the General Partner's obligations described
in this Section 8.6 and (iii) to cause the General Partner to cause the
Partnership to perform the Partnership's obligations described in this
Section 8.6.
(h) Additional Rights. In case Regency shall issue rights,
options or warrants to all holders of its Shares entitling them to
subscribe for or purchase Shares or other securities convertible into
Shares at a price per share less than the current per share market
price as of the day before the "ex date" with respect to the issuance
or distribution requiring such computation, each Original Limited
Partner holding Redemption Rights shall be entitled to receive such
number of such rights, options or warrants, as the case may be, as he
would have been entitled to receive had he exercised all of his then
existing Redemption Rights immediately prior to the record date for
such issuance by Regency. The term "ex date" shall mean the first date
on which Shares trade regularly without the right to receive such
issuance or distribution. In case the Shares shall be changed into the
same or a different number of shares of any class or classes of stock,
whether by capital reorganization, reclassification, or otherwise
(other than subdivision or combination of Shares or a stock dividend
described in this definition), then and in each such event the Original
Limited Partners holding Redemption Rights shall have the right
thereafter to exercise their Redemption Rights for the kind and amount
of shares and other securities and property that would have been
received upon such reorganization, reclassification or other change by
holders of the number of Shares with respect to which such Redemption
Rights could have been exercised immediately prior to such
reorganization, reclassification or change.
(i) Distributions. A Redeeming Partner exercising a
Redemption Right with a Specified Redemption Date after a Partnership
Record Date and prior to the payment of the distribution of Available
Cash relating to such Partnership Record Date shall retain the right to
receive such distribution with respect to such Units redeemed on such
Specified Redemption Date.
Section 8.7 Regency's Assumption of Right. Notwithstanding the
provisions of Section 8.6, Regency may, in its sole and absolute discretion,
assume directly and satisfy a Redemption Right by paying to the Redeeming
Partner the Share Amount on the Specified Redemption Date, whereupon Regency
shall acquire the Units offered for redemption by the Redeeming Partner and
shall be treated for all purposes of this Agreement as the owner of such Units,
which shall become General Partner Units. In the event Regency shall exercise
its right to satisfy the Redemption Right in the manner described in the
preceding sentence, the Partnership shall have no obligation to pay any amount
to the Redeeming Partner with respect to such Redeeming Partner's exercise of
the Redemption Right, and each of the Redeeming Partner, the Partnership, the
General Partner and Regency shall treat the transaction between Regency and the
Redeeming Partner as a sale of the Redeeming Partner's Units to Regency for
58
federal income tax purposes. Regency agrees that if the General Partner elects
to pay the Redemption Amount through the payment of the Share Amount, Regency
shall guarantee the General Partner's payment thereof.
Article 9
Books, Records, Accounting And Reports
Section 9.1 Records and Accounting. The General Partner shall keep
or cause to be kept at the principal office of the Partnership appropriate books
and records with respect to the Partnership's business, including, without
limitation, all books and records necessary to provide to the Limited Partners
any information, lists and copies of documents required to be provided pursuant
to Section 8.5 or Section 9.3 hereof. Any records maintained by or on behalf of
the Partnership in the regular course of its business may be kept on, or be in
the form of, magnetic tape, photographs, micrographics or any other information
storage device; provided, that the records so maintained are convertible into
clearly legible written form within a reasonable period of time. The books of
the Partnership shall be maintained for financial purposes on an accrual basis
in accordance with generally accepted accounting principles and for tax
reporting purposes on the accrual basis.
Section 9.2 Fiscal Year. The fiscal year of the Partnership shall
be the calendar year.
Section 9.3 Reports.
(a) Annual Reports. As soon as practicable, but in no event
later than the date when mailed to Regency's shareholders, the General
Partner shall cause to be mailed to each Limited Partner as of the
close of the Partnership Year, an annual report containing financial
statements of the Partnership, or of Regency if such statements are
prepared solely on a consolidated basis with Regency for such
Partnership Year, presented in accordance with generally accepted
accounting principles, such statements to be audited by a nationally
recognized firm of independent public accountants selected by the
General Partner.
(b) Quarterly Reports. As soon as practicable, but in no
event later than the date when mailed to Regency's shareholders, the
General Partner shall cause to be mailed to each Limited Partner as of
the last day of the calendar quarter (except the last calendar quarter
of each year) who has asked to be placed on the mailing list for the
same, a report containing unaudited financial statements of the
Partnership, or of Regency if such statements are prepared solely on a
consolidated basis with Regency, and such other information as may be
required by applicable law or regulation, or as the General Partner
determines to be appropriate.
(c) Other. During the pendency of the Redemption Rights,
Limited Partners holding Redemption Rights shall receive in a timely
manner all other communications transmitted from time to time by
Regency to its shareholders.
59
Article 10
Tax Matters
Section 10.1 Preparation of Tax Returns. The General Partner shall
arrange for the preparation and timely filing of all returns of Partnership
income, gains, deductions, losses and other items required of the Partnership
for federal and state income tax purposes and shall use all reasonable efforts
to furnish, within 90 days of the close of each taxable year, the tax
information reasonably required by Limited Partners for federal and state income
tax reporting purposes.
Section 10.2 Tax Elections. Except as otherwise provided herein, the
General Partner shall, in its sole and absolute discretion, determine whether to
make any available election pursuant to the Code; provided, however, that the
General Partner shall make the election under Section 754 of the Code in
accordance with applicable Regulations thereunder. The General Partner shall
have the right to seek to revoke any such election (including, without
limitation, the election under Section 754 of the Code) upon the General
Partner's determination in its sole and absolute discretion that such revocation
is in the best interests of the Partners.
Section 10.3 Tax Matters Partner.
(a) General. The General Partner shall be the "tax matters
partner" of the Partnership for federal income tax purposes. Pursuant
to Section 6223(c) of the Code, upon receipt of notice from the IRS of
the beginning of an administrative proceeding with respect to the
Partnership, the tax matters partner shall furnish the IRS with the
name, address and profit interest of each of the Limited Partners;
provided, however, that such information is provided to the Partnership
by the Limited Partners.
(b) Powers. The tax matters partner is authorized, but not
required:
(i) to enter into any settlement with the IRS with
respect to any administrative or judicial proceedings for the
adjustment of Partnership items required to be taken into
account by a Partner for income tax purposes (such
administrative proceedings being referred to as a "tax audit"
and such judicial proceedings being referred to as "judicial
review"), and in the settlement agreement the tax matters
partner may expressly state that such agreement shall bind all
Partners, except that such settlement agreement shall not bind
any Partner (1) who (within the time prescribed pursuant to the
Code and Regulations) files a statement with the IRS providing
that the tax matters partner shall not have the authority to
enter into a settlement agreement on behalf of such Partner or
(2) who is a "notice partner" (as defined in Section 6231 of the
Code) or a member of a "notice group" (as defined in Section
6223(b)(2) of the Code), and, to the extent provided by law, the
General Partner shall cause each Limited Partner to be
designated a notice partner;
60
(ii) in the event that a notice of a final
administrative adjustment at the Partnership level of any item
required to be taken into account by a Partner for tax purposes
(a "final adjustment") is mailed or otherwise given to the tax
matters partner, to seek judicial review of such final
adjustment, including the filing of a petition for readjustment
with the Tax Court or the United States Claims Court, or the
filing of a complaint for refund with the District Court of the
United States for the district in which the Partnership's
principal place of business is located;
(iii) to intervene in any action brought by any other
Partner for judicial review of a final adjustment;
(iv) to file a request for an administrative
adjustment with the IRS at any time and, if any part of such
request is not allowed by the IRS, to file an appropriate
pleading (petition, complaint or other document) for judicial
review with respect to such request;
(v) to enter into an agreement with the IRS to
extend the period for assessing any tax which is attributable to
any item required to be taken into account by a Partner for tax
purposes, or an item affected by such item; and
(vi) to take any other action on behalf of the
Partners of the Partnership in connection with any tax audit or
judicial review proceeding to the extent permitted by applicable
law or regulations.
The taking of any action and the incurring of any expense by
the tax matters partner in connection with any such proceeding, except
to the extent required by law, is a matter in the sole and absolute
discretion of the tax matters partner, and the provisions relating to
indemnification of the General Partner set forth in Section 7.7 of this
Agreement shall be fully applicable to the tax matters partner in its
capacity as such.
(c) Reimbursement. The tax matters partner shall receive no
compensation for its services. All third-party costs and expenses
incurred by the tax matters partner in performing its duties as such
(including legal and accounting fees) shall be borne by the
Partnership. Nothing herein shall be construed to restrict the
Partnership from engaging an accounting firm and a law firm to assist
the tax matters partner in discharging his duties hereunder, so long as
the compensation paid by the Partnership for such services is
reasonable.
Section 10.4 Organizational Expenses. The Partnership shall elect to
deduct expenses, if any, incurred by it in organizing the Partnership ratably
over a 60 month period as provided in Section 709 of the Code.
61
Article 11
Transfers And Withdrawals
Section 11.1 Transfer.
(a) Definition. The term "transfer," when used in this
Article 11 with respect to a Partnership Unit, shall be deemed to refer
to a transaction by which the General Partner purports to assign its
General Partnership Interest to another Person or by which a Limited
Partner purports to assign its Limited Partnership Interest to another
Person, and includes a sale, assignment, gift, pledge, encumbrance,
hypothecation, mortgage, exchange or any other disposition by law or
otherwise. The term "transfer" when used in this Article 11 does not
include any redemption of Partnership Units by a Limited Partner.
(b) Requirements. No Partnership Interest shall be
transferred, in whole or in part, except in accordance with the terms
and conditions set forth in this Article 11. Any transfer or purported
transfer of a Partnership Interest not made in accordance with this
Article 11 shall be null and void.
Section 11.2 Transfer of General Partner's Partnership Interests.
(a) General Partnership Interest. The General Partner may
not transfer any of its General Partnership Interest (other than any
transfer to an Affiliate of the General Partner) or withdraw as General
Partner (other than pursuant to a permitted transfer), other than in
connection with a transaction described in Section 11.2(b). Any
transfer or purported transfer of the General Partner's Partnership
Interest not made in accordance with this Section 11.2 shall be null
and void. Notwithstanding any permitted transfer of its General
Partnership Interest or withdrawal as General Partner hereunder (other
than in connection with a transaction described in Section 11.2(b)),
Regency shall remain subject to Section 8.6 and Section 8.7 of this
Agreement unless such transferee General Partner provides substantially
similar rights to the Limited Partners and Consent of the Limited
Partners is obtained. Nothing contained in this Section 11.2(a) shall
entitle the General Partner to withdraw as General Partner unless a
successor General Partner has been appointed and approved by the
Consent of the Limited Partners. Any General
Partner other than Regency admitted to the Partnership by reason of
being an Affiliate of Regency shall be a subsidiary of Regency so long
as it is the General Partner, unless the Consent of the Limited
Partners is obtained.
(b) Transfer in Connection With Reclassification,
Recapitalization, or Business Combination Involving General Partner.
Subject to the provisions of Section 4.5(f), neither the General
Partner nor Regency shall engage in any merger, consolidation or other
business combination or transaction with or into another Person or sale
of all or substantially all of its assets, or any reclassification, or
recapitalization (other than a change in par value, or a change in the
number of shares of Common Stock resulting from a subdivision or
combination as described in the definition of Xxxx
00
Xxxxxxxxxx Xxxxxx) ("Transaction"), unless as a result of the
Transaction such other Person (i) agrees that each Limited Partner who
holds a Redemption Right shall thereafter remain entitled to exchange
each Partnership Unit owned by such Limited Partner (after application
of the Unit Adjustment Factor) for an amount of cash, securities, or
other property equal to the greatest amount of cash, securities or
other property paid to a holder of one Share in consideration of one
Share which a Limited Partner holding a Redemption Right would have
received at any time during the period from and after the date on which
the Transaction is consummated, as if the Limited Partner had exercised
its Redemption Right immediately prior to the Transaction and received
the Share Amount, and (ii) agrees to assume the General Partner's
obligations pursuant to Section 8.6 hereof, provided, that if, in
connection with the Transaction, a purchase, tender or exchange offer
shall have been made to and accepted by the holders of more than 50
percent of the outstanding shares of Common Stock, the holders of such
Partnership Units shall receive the greatest amount of cash,
securities, or other property which a Limited Partner holding a
Redemption Right would have received had it exercised the Redemption
Right and received the Share Amount in redemption of its Partnership
Units immediately prior to the expiration of such purchase, tender or
exchange offer. Prior to consummating any such Transaction, Regency
shall cause appropriate amendments to be made to this Agreement
pursuant to Section 14.1(b) (including the definitions of Shares, Unit
Adjustment Factor and Value) to carry out the intent of the parties
that the rights of the Limited Partners holding Redemption Rights
hereunder shall not be prejudiced as the result of any such
Transaction. Notwithstanding anything contained in this Section 11.2(b)
to the contrary, the General Partner shall not engage in a Transaction
that causes the Original Limited Partners to recognize gain or loss for
federal income tax purposes.
(c) Limited Partnership Interests. The General Partner may
transfer all or any portion of its Limited Partnership Interests, or
any of the rights associated with such Limited Partnership Interests,
to any party without the consent of the Partnership or any Partner
(regardless of whether such transfer triggers a termination of the
Partnership for tax purposes under Section 708 of the Code).
(d) Admission of Additional General Partner. Except as
provided in Section 11.2(a) and Section 11.2(b), the General Partner
may not admit an additional general partner other than an Affiliate of
the General Partner pursuant to Section 11.2(a).
Section 11.3 Limited Partners' Rights to Transfer.
(a) General. No transfer of a Limited Partnership Interest
by a Limited Partner is permitted without the prior written consent of
the General Partner, which it may withhold in its sole and absolute
discretion; provided, that a Limited Partner may transfer Units without
the consent of the General Partner: (i) to members of the Limited
Partner's Immediate Family or one or more trusts for their benefit
pursuant to applicable laws of descent and distribution, gift or
otherwise; (ii) among its Affiliates; (iii) to a lender, provided that
the Units are not Pledged Units, where such Units are
63
pledged to secure a bona fide obligation of the Limited Partner and any
transfer in accordance with the rights of such lender under the
instruments evidencing such obligation (provided that the General
Partner receives 10 days prior written notice of any transfer under
this clause (a)); (iv) if the Limited Partner is a trust, to the
beneficiaries of the Limited Partner or to another trust (1) that is
either established by the same grantor as the Limited Partner or (2)
whose beneficiaries consist of members of the Immediate Family of the
grantor of the Limited Partner or (3) whose beneficiaries consist of
beneficiaries of the transferor trust or members of their Immediate
Family; (v) if the Limited Partner is an entity, to the direct or
indirect equity holders of the Limited Partner; and (vi) to other
Limited Partners. In order to effect any transfer under this Section
11.3, the Limited Partner must deliver to the General Partner a duly
executed copy of the instrument making such transfer and such
instrument must evidence the written acceptance by the assignee of all
of the terms and conditions of this Agreement, including, where
applicable, the security interest described in Section 5.3, and
represent that such assignment was made in accordance with all
applicable laws and regulations.
(b) Incapacitated Limited Partners. If a Limited Partner is
subject to Incapacity, the executor, administrator, trustee, committee,
guardian, conservator or receiver of such Limited Partner's estate
shall have all the rights of a Limited Partner, but not more rights
than those enjoyed by other Limited Partners for the purpose of
settling or managing the estate and such power as the Incapacitated
Limited Partner possessed to transfer all or any part of his or its
interest in the Partnership. The Incapacity of a Limited Partner, in
and of itself, shall not dissolve or terminate the Partnership.
(c) No Transfers Violating Securities Laws. The General
Partner may prohibit any transfer by a Limited Partner of his
Partnership Units if, in the opinion of legal counsel to the
Partnership, such transfer would require filing of a registration
statement under the Securities Act of 1933 or would otherwise violate
any federal or state securities laws or regulations applicable to the
Partnership or the Partnership Units.
(d) Transfers Resulting in Corporation Status. Regardless of
whether the General Partner is required to provide or has provided its
consent under Section 11.3(a), no transfer by a Limited Partner of his
Partnership Units (or any economic or other interest, right or
attribute therein) may be made to any Person if legal counsel for the
Partnership renders an opinion letter that it creates a substantial
risk that the Partnership would be treated as an association taxable as
a corporation.
(e) Transfers Causing Termination. Regardless of whether the
General Partner is required to provide or has provided its consent
under Section 11.3(a), no transfer of any Partnership Interests other
than the exercise of Redemption Rights shall be effective if such
transfer would, in the opinion of counsel for the Partnership, result
in the termination of the Partnership for federal income tax purposes,
in which event
64
such transfer shall be made effective as of the first fiscal quarter in
which such termination would not occur, if the Partner making such
transfer continues to desire to effect the transfer.
(f) Transfer to Certain Lenders. Notwithstanding anything
contained herein to the contrary, no transfer of any Partnership Units
may be made to a lender to the Partnership or any Person who is related
(within the meaning of Section 1.752-4(b) of the Regulations) to any
lender to the Partnership whose loan constitutes a Nonrecourse
Liability, without the consent of the General Partner, which consent
may be given or withheld by the General Partner in its sole and
absolute discretion, provided, that as a condition to such consent the
lender will be required to enter into an arrangement with the
Partnership and the General Partner to redeem for the Redemption Amount
any Partnership Units in which a security interest is held,
simultaneously with the time at which such lender would be deemed to be
a partner in the Partnership for purposes of allocating liabilities to
such lender under Section 752 of the Code.
(g) Transfers by Limited Partners Requiring 1934 Act
Registration. Regardless of whether the General Partner is required to
provide or has provided its consent under Section 11.3(a), no transfer
by a Limited Partner of his or its Limited Partnership Interest (or any
economic or other interest, right or attribute therein) may be made to
any Person if (i) such transfer would require the Partnership to
register its equity securities under the Securities Exchange Act of
1934 and (ii) the Partnership does not then have any class of equity
securities so registered.
(h) Transfers by Series A Preferred Partners. In addition to
the other restrictions on transfer set forth in this Article 11, which
apply to Series A Preferred Units, no transfer of the Series A
Preferred Units may be made without the consent of the General Partner,
which consent may be given or withheld in its sole and absolute
discretion, if such transfer would result in more than four partners
holding all outstanding Series A Preferred Units within the meaning of
Regulation Section 1.7704-1(h)(3).
(i) Transfers Violating PTP Obligations. Regardless of
whether the General Partner is required to provide or has provided its
consent under Section 11.3(a), unless the provisions of this Section
11.3(i) are waived in writing by the General Partner, on or before
December 31, 2004, no transfer (or purported transfer) by a Limited
Partner of his or its Partnership Units (or any economic or other
interest, right or attribute therein) may be made to any Person, and
any such transfer (or purported transfer) shall be void ab initio, and
no Person shall otherwise become a Partner if (a) legal counsel to the
Partnership renders an opinion letter that such transfer creates a
substantial risk that the Partnership would be treated as a PTP within
the meaning of Section 7704 of the Code or (b) such transfer would
cause the Partnership to have more than 100 Partners within the meaning
of Regulation Section 1.7704-1(h)(3) immediately after such transfer
("Prohibited PTP Transfer"). If a Limited Partner presents any Units to
the General Partner for transfer, the General Partner shall advise the
Limited Partner
65
within ten Business Days after receiving the transfer request if the
purported transfer would constitute a Prohibited Transfer.
Notwithstanding the foregoing, a transfer of Partnership Units which
occurs by operation of law or as a result of a bona fide foreclosure of
a lender's security interest and which would otherwise constitute a
Prohibited PTP Transfer shall result in the mandatory redemption of
such Units for the Share Amount simultaneously with the time at which
the respective transferee would otherwise be deemed a Partner in the
Partnership but for this sentence; provided, however, if the issuance
of the Share Amount pursuant to this sentence would violate the
provisions of Section 5.2 of the Articles of Incorporation, then the
Partnership shall pay the Cash Amount in lieu of the Share Amount in
satisfaction of such mandatory redemption. (For purposes of this
Section 11.3, "Valuation Date" shall mean the date the Partnership
receives notice of the Prohibited PTP Transfer).
Section 11.4 Substituted Limited Partners.
(a) Consent of General Partner Required. The Limited Partner
shall have the right to substitute a transferee as a Limited Partner in
his place, but only if such transferee is a permitted transferee under
Section 11.3, in which event such substitution shall occur if the
Limited Partner so provides. With respect to any other transfers, the
General Partner shall have the right to consent to the admission of a
transferee of the interest of a Limited Partner pursuant to this
Section 11.4 as a Substituted Limited Partner, which consent may be
given or withheld by the General Partner in its sole and absolute
discretion. The General Partner's failure or refusal to permit a
transferee of any such interests to become a Substituted Limited
Partner shall not give rise to any cause of action against the
Partnership or any Partner.
(b) Rights and Duties of Substituted Limited Partners. A
transferee who has been admitted as a Substituted Limited Partner in
accordance with this Article 11 shall have all the rights and powers
and be subject to all the restrictions and liabilities of a Limited
Partner under this Agreement.
(c) Amendment of Exhibit A. Upon the admission of a
Substituted Limited Partner, the General Partner shall amend Exhibit A
to reflect the name, address, number of Partnership Units, and
Percentage Interest of such Substituted Limited Partner and to
eliminate or adjust, if necessary, the name, address and interest of
the predecessor of such Substituted Limited Partner.
Section 11.5 Assignees. If a transferee is not admitted as a
Substituted Limited Partner in accordance with Section 11.4(a), such transferee
shall be considered an Assignee for purposes of this Agreement. An Assignee
shall be entitled to all the rights of an assignee of a limited partnership
interest under the Act, including (if applicable) the right to redeem Units
under Section 8.6 or any separate redemption agreement, and the right to receive
distributions from the Partnership and the share of Net Income, Net Losses,
gain, loss and Recapture Income attributable to the Partnership Units assigned
to such transferee, but shall not be deemed to be a holder of Partnership Units
for any other purpose under this Agreement, and
66
shall not be entitled to vote such Partnership Units in any matter presented to
the Limited Partners for a vote (such Partnership Units being deemed to have
been voted on such matter in the same proportion as all Partnership Units of the
same class held by Limited Partners are voted). In the event any such transferee
desires to make a further assignment of any such Partnership Units, such
transferee shall be subject to all the provisions of this Article 11 to the same
extent and in the same manner as any Limited Partner desiring to make an
assignment of Partnership Units.
Section 11.6 General Provisions.
(a) Withdrawal of Limited Partner. No Limited Partner may
withdraw from the Partnership other than as a result of a permitted
transfer of all of such Limited Partner's Partnership Units in
accordance with this Article 11 or pursuant to the redemption of all of
his Partnership Units.
(b) Termination of Status as Limited Partner. Any Limited
Partner who shall transfer all of his Partnership Units in a transfer
permitted pursuant to this Article 11 or pursuant to the redemption of
all of his Partnership Units shall cease to be a Limited Partner.
(c) Timing of Transfers. Transfers pursuant to this Article
11 may only be made on the first day of a fiscal quarter, unless the
General Partner otherwise agrees, or unless resulting by operation of
law.
(d) Allocation When Transfer Occurs. If any Partnership
Interest is transferred during any quarterly segment of the
Partnership's fiscal year in compliance with the provisions of this
Article 11 or redeemed pursuant to Section 8.6, Net Income, Net Losses,
each item thereof and all other items attributable to such interest for
such fiscal year shall be divided and allocated between the transferor
Partner and the transferee Partner by taking into account their varying
interests during the fiscal year in accordance with Section 706(d) of
the Code, using the interim closing of the books method (other than Net
Income or Net Loss attributable to a Capital Transaction, which shall
be allocated as of the Capital Transaction Record Date). Solely for
purposes of making such allocations, each of such items for the
calendar month in which the transfer or redemption occurs shall be
allocated to the Person who is a Partner as of midnight on the last day
of said month. All distributions of Available Cash with respect to
which the Partnership Record Date is before the date of such transfer
or redemption shall be made to the transferor Partner, and all
distributions of Available Cash thereafter shall be made to the
transferee Partner.
(e) Continued Obligations Following Redemption by Certain
Additional Limited Partners. Anything herein to the contrary
notwithstanding, if an Additional Limited Partner is an Electing
Partner (as defined in Section 13.4), and if such Additional Limited
Partner exercises a Redemption Right with respect to such Additional
Limited Partner's entire Limited Partnership Interest, and the General
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Partner determines in good faith that such Redeeming Partner has
exercised a Redemption Right in order to avoid such Additional Limited
Partner's deficit Capital Account restoration obligations in Section
13.4, the General Partner may require, upon delivery of written notice
to the Redeeming Partner no later than thirty (30) days after the
applicable Specified Redemption Date, that the Redeeming Partner remain
liable to restore his "Hypothetical Negative Capital Account Balance"
if the Partnership adopts a plan of liquidation within three hundred
sixty five (365) days following such applicable Specified Redemption
Date. A Redeeming Partner's Hypothetical Negative Capital Account
Balance is the hypothetical amount such Redeeming Partner would have
had to pay to the Partnership pursuant to his obligations under Section
13.4 hereof if he had remained as an Additional Limited Partner until
the liquidation of the Partnership.
Article 12
Admission Of Partners
Section 12.1 Admission of Successor General Partner. A successor to
all of the General Partner's General Partnership Interest pursuant to Section
11.2 hereof who is proposed and permitted to be admitted as a successor General
Partner shall be admitted to the Partnership as the General Partner, effective
upon such transfer. Any such transferee shall assume all of the General
Partner's obligations under this Agreement and shall carry on the business of
the Partnership without dissolution. In each case, the admission shall be
subject to the successor General Partner executing and delivering to the
Partnership an acceptance of all of the terms and conditions of this Agreement
and such other documents or instruments as may be required to effect the
admission.
Section 12.2 Admission of Additional Limited Partners.
(a) General. A Person who makes a Capital Contribution to the
Partnership in accordance with Section 4.2 of this Agreement shall be
admitted to the Partnership as an Additional Limited Partner upon
furnishing to the General Partner (i) evidence of acceptance in form
satisfactory to the General Partner of all of the terms and conditions
of this Agreement, including, without limitation, the power of attorney
granted in Article 16 hereof and (ii) such other documents or
instruments as may be required in the sole and absolute discretion of
the General Partner in order to effect such Person's admission as an
Additional Limited Partner.
(b) Consent of General Partner Required. Notwithstanding
anything to the contrary in this Section 12.2, no Person shall be
admitted as an additional Limited Partner without the consent of the
General Partner (other than a Person to whom a Limited Partner may
transfer Units pursuant to Section 11.3(a) without the consent of the
General Partner), which consent may be given or withheld in the General
Partner's sole and absolute discretion. The admission of any Person as
an additional Limited Partner shall become effective on the date upon
which the name of such Person is recorded on the books and records of
the Partnership, following the consent of the General Partner to such
admission.
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Section 12.3 Amendment of Agreement and Certificate. For the
admission to the Partnership of any Partner, the General Partner shall, subject
to the requirements of Section 4.2, take all steps necessary and appropriate
under the Act to amend the records of the Partnership and, if necessary, to
prepare as soon as practical an amendment of this Agreement (including an
amendment of Exhibit A) and, if required by law, shall prepare and file an
amendment to the Certificate and may for this purpose exercise the power of
attorney granted pursuant to Article 16 hereof.
Section 12.4 Representations and Warranties of Additional Limited
Partners. As inducement for their admission to the Partnership, each Additional
Limited Partner hereby represents and warrants that such Limited Partner (a) has
such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of an investment in the Partnership;
(b) has been given the opportunity to examine all documents and to ask questions
of, and to receive answers from, the General Partner and its representatives
concerning the terms and conditions of the acquisition by it of Units in the
Partnership, and to obtain any additional information which it deems necessary
to verify the accuracy of the information with respect thereto; and (c)
understands that there will be no public market for the Units. Such Additional
Limited Partner has received and carefully reviewed copies of the reports filed
by Regency for its two most recent fiscal years and the interim period to date
under the Securities Exchange Act of 1934 and such additional information
concerning Regency, the Partnership and the transactions contemplated by this
Agreement, to the extent that Regency could acquire such information without
unreasonable effort or expense, as such Additional Limited Partner deems
necessary for purposes of making an investment in the Partnership. The Units in
the Partnership acquired by such Additional Limited Partner are being acquired
by such Limited Partner for its own account for investment and not with a view
to, or for resale in connection with, the public distribution or other
disposition thereof. Such Additional Limited Partner agrees as a condition to
the issuance of such Units in its name that any transfer, sale, assignment,
hypothecation, offer or other disposition of such Units may not be effected
except in accordance with the terms of this Agreement and pursuant to an
effective registration statement under the Securities Act and the rules and
regulations promulgated thereunder, or an exemption therefrom, and in compliance
with all other applicable securities and "blue sky" laws. Each Additional
Limited Partner acknowledges that the Partnership is not required to register
any of the Units under the Securities Act or any other applicable securities or
"blue sky" laws. Each such Additional Limited Partner represents and warrants
that it has relied on its own advisors for advice in connection with structuring
the transactions contemplated by this Agreement and is not relying on the
General Partner or its accountants, attorneys or other advisors with regard to
such matters.
Article 13
Dissolution And Liquidation
Section 13.1 Dissolution. The Partnership shall not be dissolved by
the admission of Substituted Limited Partners or Additional Limited Partners or
by the admission of a successor General Partner in accordance with the terms of
this Agreement. Upon the withdrawal of the General Partner, any successor
General Partner shall continue the business of the Partnership.
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Notwithstanding anything contained herein to the contrary, except as provided
below in this Section 13.1, the General Partner and the Partnership shall not
dissolve the Partnership, adopt a plan of liquidation for the Partnership or
sell all or substantially all of the assets of the Partnership in a Liquidating
Transaction or otherwise without obtaining (i) the Consent of the Original
Limited Partners and (ii) the Consent of the Additional Limited Partners. The
Partnership shall dissolve, and its affairs shall be wound up, upon the first to
occur of any of the following (each an "Event of Dissolution"):
(a) Expiration of Term -- the expiration of its term as
provided in Section 2.4 hereof;
(b) Withdrawal of General Partner -- an event of withdrawal
of the last remaining General Partner, as defined in the Act (other
than an event of bankruptcy), unless, within 90 days after the
withdrawal, all the remaining Limited Partners agree in writing to
continue the business of the Partnership and to the appointment,
effective as of the date of withdrawal, of a substitute General
Partner;
(c) Judicial Dissolution Decree -- entry of a decree of
judicial dissolution of the Partnership pursuant to the provisions of
the Act; or
(d) Bankruptcy or Insolvency of General Partner -- the last
remaining General Partner shall be Incapacitated by reason of its
bankruptcy unless, within 90 days after the withdrawal, all the
remaining Limited Partners agree in writing to continue the business of
the Partnership and to the appointment, effective as of the date of
withdrawal, of a substitute General Partner.
Section 13.2 Winding Up.
(a) General. The General Partner shall provide written
notice to the Limited Partners of the occurrence of an Event of
Dissolution, giving them at least 20 days in which to exercise any
Redemption Right prior to the distribution of any proceeds from the
liquidation of the Partnership pursuant to this Section 13.2(a). Upon
the occurrence of an Event of Dissolution, the Partnership shall
continue solely for the purposes of winding up its affairs in an
orderly manner, liquidating its assets, and satisfying the claims of
its creditors and Partners. No Partner shall take any action that is
inconsistent with, or not necessary to or appropriate for, the winding
up of the Partnership's business and affairs. The General Partner (or,
in the event there is no remaining General Partner, any Person elected
by a majority in interest of the Limited Partners (the "Liquidator"))
shall be responsible for overseeing the winding up and dissolution of
the Partnership and shall take full account of the Partnership's
liabilities and property and the Partnership property (subject to
Section 13.2(b) and Section 13.2(c)) shall be liquidated as promptly as
is consistent with obtaining the fair value thereof, and the proceeds
therefrom shall be applied and distributed in the following order:
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(i) First, to the payment and discharge of all of
the Partnership's debts and liabilities to creditors other than
the Partners;
(ii) Second, to the payment and discharge of all of
the Partnership's debts and liabilities to the Partners, pro
rata in accordance with amounts owed to each such Partner;
(iii) Third, to the Series A Preferred Partners in
accordance with the provisions of Section 4.5(d); and
(iv) The balance, if any, to the General Partner and
Limited Partners in accordance with their Capital Accounts,
after giving effect to all contributions, distributions, and
allocations for all periods.
The General Partner shall not receive any additional compensation for
any services performed pursuant to this Article 13.
(b) Deferred Liquidation. Notwithstanding the provisions of
Section 13.2(a) hereof which require liquidation of the assets of the
Partnership, but subject to the order of priorities set forth therein,
and further subject to Section 13.2(c) hereof and any separate
agreement of the Partnership or the General Partner with respect to the
distribution in kind to Additional Limited Partners of assets
contributed by such Additional Limited Partners (or assets exchanged
for such assets), if prior to or upon dissolution of the Partnership
the Liquidator determines that an immediate sale of part or all of the
Partnership's assets would be impractical or would cause undue loss to
the Partners, the Liquidator may, in its sole and absolute discretion,
defer for a reasonable time the liquidation of any assets except those
necessary to satisfy liabilities of the Partnership (including to those
Partners as creditors) and/or distribute to the Partners, in lieu of
cash, as tenants in common and in accordance with the provisions of
Section 13.2(a) and Section 13.2(c) hereof and any such separate
agreement, undivided interests in such Partnership assets as the
Liquidator deems not suitable for liquidation. Any such distributions
in kind shall be made only if, in the good faith judgment of the
Liquidator, such distributions in kind are in the best interest of the
Partners, and shall be subject to such conditions relating to the
disposition and management of such properties as the Liquidator deems
reasonable and equitable and to any agreements governing the operation
of such properties at such time. The Liquidator shall determine the
fair market value of any property distributed in kind using such
reasonable method of valuation as it may adopt.
(c) Distribution of Briarcliff Village.
(i) In the event that the Partnership is dissolved
in accordance with this Article 13, the Briarcliff Village
Property (as defined in Section 7.1(c)) will be distributed
in-kind to the Original Briarcliff Partners (as defined in
Section 7.1(c)) who continue, as of such time, to hold Original
Limited Partnership Units attributable to the contribution of
the Briarcliff Village Property to Branch
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Properties, L.P. and Branch Properties, L.P.'s subsequent
contribution of the Briarcliff Village Property to the
Partnership, with such Partners to take title to the Briarcliff
Village Property in any manner which they are able to agree
among themselves. In the event that such Partners are to receive
the Briarcliff Village Property pursuant to this Section
13.2(c), then the Briarcliff Village Property shall have the net
value agreed upon by the General Partner and the Partners
receiving an interest in the Briarcliff Village Property, or, if
they cannot agree, then the Briarcliff Village Property shall be
valued in accordance with Section 13.2(d).
(ii) If the net value of the Briarcliff Village
Property determined pursuant to Section 13.2(c)(i) exceeds the
amount to which the Partners receiving the Briarcliff Village
Property are entitled pursuant to this Article 13, then such
partners may contribute to the capital of the Partnership the
amount of cash equal to such excess, pro rata in proportion to
the relative number of Units of each such Partners attributable
to the contribution of the Briarcliff Village Property to Branch
Properties, L.P. and Branch Properties, L.P.'s subsequent
contribution of the Briarcliff Village Property to the
Partnership. If such a contribution is not made in full, then
Section 13.2(c)(i) shall not apply and the Liquidator shall be
entitled to sell the Briarcliff Village Property in connection
with the dissolution of the Partnership.
(d) Appraisal. In the event that the Briarcliff Village
Property is to be distributed to the Original Briarcliff Partners in
liquidation of the Partnership pursuant to the provisions of this
Section 13.1(d), then the amount of such distribution shall be
determined as follows if the net value thereof has not been agreed on
pursuant to Section 13.2(c)(i):
(i) Within twenty (20) days after the determination
that the Partnership shall distribute the Briarcliff Village
Property to the Original Briarcliff Partners, the General
Partner and a Majority-In-Interest of the Original Briarcliff
Partners (as defined in Section 7.1(c)) shall each select an
independent, regionally or nationally recognized appraiser or
appraisal group which is experienced in valuing separate real
estate property ("Appraiser"), and the two Appraisers selected
by the parties shall jointly select a third Appraiser. Each
party shall pay the cost of their respective Appraiser and shall
split the cost of the third Appraiser.
(ii) Within sixty (60) days of selection of the third
Appraiser, each of the three Appraisers shall determine the
gross fair market value of the Briarcliff Village Property as of
the date of the election to liquidate the Partnership,
calculated based on the net fair market value of Briarcliff
Village (net of the loans encumbering Briarcliff Village),
taking into consideration the terms and relative value of the
loans encumbering Briarcliff Village, the fact that Briarcliff
Village is not being sold and the loans are not being repaid.
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(iii) Upon receipt of the three appraisals determining
the gross fair market value of the Briarcliff Village Property,
the two closest gross fair market values shall be averaged, with
such average to constitute the distribution value of the
Briarcliff Village Property.
Section 13.3 Compliance with Timing Requirements of Regulations;
Allowance for Contingent or Unforeseen Liabilities or Obligations.
Notwithstanding anything to
the contrary in this Agreement, in the event the Partnership is "liquidated"
within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions
shall be made pursuant to this Article 13 to the General Partner and Limited
Partners who have positive Capital Accounts in compliance with Regulations
Section 1.704-1(b)(2)(ii)(b)(2) (including any timing requirements therein).
Except as provided in Section 13.4, if any Limited Partner has a deficit balance
in his Capital Account (after giving effect to all contributions, distributions
and allocations for all taxable years, including the year during which such
liquidation occurs), such Partner shall have no obligation to make any
contribution to the capital of the Partnership with respect to such deficit, and
such deficit shall not be considered a debt owed to the Partnership or to any
other Person for any purpose whatsoever. In the sole and absolute discretion of
the General Partner, a pro rata portion of the distributions that would
otherwise be made to the General Partner and Limited Partners pursuant to this
Article 13 may be: (i) distributed to a liquidating trust established for the
benefit of the General Partner and Limited Partners for the purposes of
liquidating Partnership assets, collecting amounts owed to the Partnership, and
paying any contingent or unforeseen liabilities or obligations of the
Partnership or of the General Partner arising out of or in connection with the
Partnership (the assets of any such trust shall be distributed to the General
Partner and Limited Partners from time to time, in the reasonable discretion of
the General Partner, in the same proportions as the amount distributed to such
trust by the Partnership would otherwise have been distributed to the General
Partner and Limited Partners pursuant to this Agreement); or (ii) withheld to
provide a reasonable reserve for Partnership liabilities (contingent or
otherwise) and to reflect the unrealized portion of any installment obligations
owed to the Partnership; provided, that such withheld amounts shall be
distributed to the General Partner and Limited Partners as soon as practicable.
Section 13.4 Deficit Capital Account Restoration.
(a) Subject to Section 13.4(b), if an Original Limited
Partner listed on Schedule 13.4(a) (who constituted an "Electing
Partner" of Branch and is referred to hereinafter as an "Electing
Partner") and any Additional Limited Partner who elects to be added to
such Schedule (also an "Electing Partner"), on the date of the
"liquidation" of his respective interest in the Partnership (within the
meaning of Regulations Section 1.704-1(b)(2)(ii)(g)), has a negative
balance in his Capital Account, then such Electing Partner shall
contribute in cash to the capital of the Partnership the lesser of (i)
the maximum amount (if any such maximum amount is stated) listed beside
such Electing Partner's name on Schedule 13.4(a) or (ii) the amount
required to increase his Capital Account as of such date to zero. Any
such contribution required of a Partner hereunder shall be made on or
before the later of (i) the end of the Partnership fiscal year in which
the interest of such Partner is liquidated or (ii) the ninetieth (90th)
day following the
73
date of such liquidation. Notwithstanding any provision hereof to the
contrary, all amounts so contributed by a partner to the capital of the
Partnership shall, upon the liquidation of the Partnership under this
Article 13, be first paid to any then creditors of the Partnership,
including Partners that are Partnership creditors (in the order
provided in Section 13.2(a)), and any remaining amount shall be
distributed to the other Partners then having positive balances in
their respective Capital Accounts in proportion to such positive
balances.
(b) After the death of an Electing Partner, the executor of
the estate of such an Electing Partner may elect to reduce (or
eliminate) the deficit Capital Account restoration obligation of such
an Electing Partner pursuant to Section 13.4(a). Such election may be
made by such executor by delivering to the General Partner within two
hundred seventy (270) days of the death of such an Electing Partner a
written notice setting forth the maximum deficit balance in his Capital
Account that such executor agrees to restore under Section 13.4(a), if
any. If such executor does not make a timely election pursuant to this
Section 13.4(b) (whether or not the balance in his Capital Account is
negative at such time), then such Electing partner's estate (and the
beneficiaries thereof who receive distribution of Partnership Units
therefrom) shall be deemed to have a deficit Capital Account
restoration obligation as set forth pursuant to the terms of Section
13.4(a).
(c) If the General Partner, on the date of "liquidation" of
its interest in the Partnership, within the meaning of Section
1.704-1(b)(2)(ii)(g) of the Regulations, has a negative balance in its
Capital Account, then the General Partner shall contribute in cash to
the capital of the Partnership the amount needed to restore its Capital
Account balance to zero. Any such contribution required to be made by
the General Partner shall be made by the General Partner on or before
the later of (i) the end of the Partnership Year in which the General
Partner's interest is liquidated, or (ii) the ninetieth (90th) calendar
day following the date of such liquidation. Notwithstanding any
provision of this Agreement to the contrary, all amounts so contributed
to the capital of the Partnership in accordance with this Section 13.4
shall upon the liquidation of the Partnership under this Article 13, be
first paid to any then creditors of the Partnership, including Partners
that are Partnership creditors (in the order provided in Section
13.2(a)), and any remaining amount shall be distributed to the other
Partners then having positive balances in their respective Capital
Accounts in proportion to such positive balances. Regency
unconditionally guarantees the obligation of the General Partner under
this Section 13.4(c) for the benefit of the Partnership and the other
Partners.
Section 13.5 Deemed Distribution and Recontribution. Notwithstanding
any other provision of this Article 13 (but subject to Section 13.3), in the
event the Partnership is liquidated within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g) but no Event of Dissolution has occurred, the Partnership's
property shall not be liquidated, the Partnership's liabilities shall not be
paid or discharged, and the Partnership's affairs shall not be wound up.
Instead, the Partnership shall be deemed to have distributed the Property in
kind to the General
74
Partner and Limited Partners, who shall be deemed to have assumed and taken such
property subject to all Partnership liabilities, all in
accordance with their respective Capital Accounts. Immediately thereafter, the
General Partner and Limited Partners shall be deemed to have recontributed the
Partnership property in kind to the Partnership, which shall be deemed to have
assumed and taken such property subject to all such liabilities.
Section 13.6 Rights of Limited Partners. Except as specifically
provided in this Agreement, including Section 7.1(a)(iii), Section 8.6, Section
8.7 and Section 13.4, each Limited Partner shall look solely to the assets of
the Partnership for the return of his Capital Contribution and shall have no
right or power to demand or receive property other than cash from the
Partnership. Except as specifically provided in this Agreement, including
Section 4.5 with respect to the Series A Preferred Units, no Limited Partner
shall have priority over any other Limited Partner as to the return of his
Capital Contributions, distributions, or allocations.
Section 13.7 Notice of Dissolution. In the event an Event of
Dissolution or an event occurs that would, but for the provisions of Section
13.1, result in a dissolution of the Partnership, the General Partner shall,
within 30 days thereafter, provide written notice thereof to each of the
Partners and to all other parties with whom the Partnership regularly conducts
business (as determined in the sole and absolute discretion of the General
Partner) and shall publish notice thereof in a newspaper of general circulation
in each place in which the Partnership regularly conducts business (as
determined in the sole and absolute discretion of the General Partner).
Section 13.8 Cancellation of Certificate of Limited Partnership. Upon
the completion of the liquidation of the Partnership as provided in Section 13.2
hereof, the Partnership shall be terminated and the Certificate and all
qualifications of the Partnership as a foreign limited partnership in
jurisdictions other than the State of Delaware shall be canceled and such other
actions as may be necessary to terminate the Partnership shall be taken.
Section 13.9 Reasonable Time for Winding-Up. A reasonable time shall
be allowed for the orderly winding-up of the business and affairs of the
Partnership and the liquidation of its assets pursuant to Section 13.2 hereof,
in order to minimize any losses otherwise attendant upon such winding-up, and
the provisions of this Agreement shall remain in effect between the Partners
during the period of liquidation.
Article 14
Amendment Of Partnership Agreement; Meetings
Section 14.1 Amendments.
(a) General. Amendments to this Agreement may be proposed
only by the General Partner, who shall submit any proposed amendment
(other than an amendment pursuant to Section 14.1(b)) to the Limited
Partners. The General Partner shall seek the written vote of the
applicable Partners on the proposed amendment or shall call a meeting
to vote thereon and to transact any other business that it may deem
appropriate. Except as provided in Section 4.5(f)(ii) and Section
14.1(b), Section 14.1(c), Section
75
14.1(d), Section 14.1(e) or Section 14.1(f) or except as may be
expressly provided to the contrary elsewhere herein, a proposed
amendment shall be adopted and be effective as an amendment hereto if
it is approved by the General Partner and it receives the Consent of
the Limited Partners.
(b) General Partner's Power to Amend. Notwithstanding
Section 14.1(a), the General Partner shall have the power, without the
consent of the Limited Partners, to amend this Agreement as may be
required to facilitate or implement any of the following purposes:
(i) to add to the obligations of the General Partner
or surrender any right or power granted to the General Partner
or any Affiliate of the General Partner for the benefit of the
Limited Partners;
(ii) to add to or change the name of the Partnership;
(iii) to reflect the admission, substitution,
termination, or withdrawal of Partners in accordance with this
Agreement;
(iv) to set forth the rights, powers, duties and
preferences of the holders of any additional Partnership
Interests issued pursuant to Section 4.2;
(v) to reflect a change that is of an
inconsequential nature and does not adversely affect the Limited
Partners in any material respect, or to cure any ambiguity,
correct or supplement any provision in this Agreement not
inconsistent with law or with other provisions, or make other
changes with respect to matters arising under this Agreement
that will not be inconsistent with law or with the provisions of
this Agreement; and
(vi) to satisfy any requirements, conditions, or
guidelines contained in any order, directive, opinion, ruling or
regulation of a federal or state agency or contained in
federal or state.
The General Partner will provide 10 days' prior written notice to the
Limited Partners when any action under this Section 14.1(b) is taken.
(c) Consent of Adversely Affected Partner Required.
Notwithstanding Section 14.1(a) hereof and subject to Section
4.5(f)(ii) hereof, this Agreement shall not be amended without the
consent of each Partner (other than a Series A Preferred Partner)
adversely affected if such amendment would (i) convert a Limited
Partner's interest in the Partnership into a general partner's
interest, (ii) modify the limited liability of a Limited Partner, (iii)
alter rights of the Partner to receive distributions pursuant to
Article 5 or Article 13, or the allocations specified in Article 6
(except as permitted pursuant to Section 4.2 or Section 4.4(c) hereof),
(iv) alter or modify the Redemption Right or Redemption Amount as set
forth in Section 8.6 and related definitions hereof, or (v) amend
Section 4.2(a) (issuances of additional Partnership
76
Interests), Section 7.1(a)(iii) (Section 1031 exchanges), Section 7.3
(restrictions on General Partner's authority), or (vi) amend this
Section 14.1(c).
(d) When Consent of Limited Partnership Interests Required.
Notwithstanding Section 14.1(a) hereof and subject to Section
4.5(f)(ii), the General Partner shall not amend Section 4.2 (issuances
of additional Partnership Interests), Section 7.6 (contracts with
Affiliates) or Section 11.2 (transfer of General Partnership Interest)
without the Consent of the Limited Partners and the General Partner
shall not amend this Section 14.1(d) without the unanimous consent of
the Limited Partners (other than Series A Preferred Partners and any
other Preferred Partners unless such other Preferred Partners are
expressly granted voting rights under this Section 14.1(d).
(e) When Consent of Other Limited Partners Required.
(i) Matters Relating to Briarcliff. Notwithstanding
Section 14.1(a) hereof, Section 7.1(c) (sale of Briarcliff
Village), Section 13.2(c) (distribution of Briarcliff Village)
and this Section 14.1(e)(i) may be amended only with the Consent
of a Majority in Interest of the Original Briarcliff Partners
(as defined in Section 7.1(c).
(ii) Matters Relating to Other Classes of Partners.
Notwithstanding Section 14.1(a) hereof, except as provided in
Section 14.1(c) and Section 4.5(f)(ii), any amendment that would
adversely affect only a class of Limited Partners, including the
Original Limited Partners, may be amended with the Consent of
such class of Limited Partners.
(f) Security Capital Consent. So long as the Stockholders
Agreement referred to in Schedule 7.8(b) remains in effect, this
Agreement shall not be amended, modified or supplemented, in any such
case, without the prior written consent of Security Capital. Any
amendment, modification or supplement adopted without Security
Capital's consent shall be void.
(g) Absence of Unanimous Consent for Fourth Amended
Agreement. In the event that the amendment and restatement of this
Agreement in the form of this Fourth Amended Agreement has been
approved with the consent of less than 100% of the Preexisting
Partners, then notwithstanding any other provision in this Agreement to
the contrary:
(i) Allocations for Non-Consenting Preexisting
Partners. The General Partner shall continue to, and shall have
the authority to, apply the provisions of Articles V and VI of
the Third Amended Agreement to those Preexisting Partners which
have not given their consent to the adoption of this Fourth
Amended Agreement so that they receive the distributions and
allocations of Net Profits and Net Losses (including income,
gain, loss and deductions) which such Limited Partners would
have received had this Fourth Amended Agreement not been
approved. Furthermore, should any non-
77
consenting Preexisting Partner consent to the adoption of this
Fourth Amended Agreement after the effective date of this Fourth
Amended Agreement, then, notwithstanding anything herein to the
contrary, the General Partner shall make such adjustments to the
application of Articles V and VI of this Agreement beginning on
the first day of January after the date of such Limited
Partner's consent so that after these adjustments, such
consenting Limited Partner will be treated in a manner which is
substantially equivalent to the treatment which such Limited
Partner would have received had such Limited Partner consented
to the adoption of this Fourth Amended Agreement as of the
effective date of this Fourth Amended Agreement.
(ii) Limitation on Issuance of Preferred Units.
Subject to Section 4.5(f)(ii), Preferred Units may be issued to
the General Partner pursuant to Section 4.2(b)(i) or to any
Limited Partner only if, as a result of such issuance and the
application of the proceeds therefrom, the sum of (i) the
aggregate liquidation preference of all outstanding Preferred
Units entitled to priority upon liquidation and (ii) the
Partnership's gross sales price of outstanding Preferred Units
entitled to priority only with respect to distributions of
Available Cash would not exceed twenty percent (20%) of the
Partnership's book value before depreciation and amortization as
of the end of the calendar quarter preceding the date of
issuance, determined in accordance with generally accepted
accounting principles. Nothing in this Section 14.1(g)(ii) shall
be construed to prohibit the General Partner from (i) redeeming
Series A Preferred Units or other Preferred Units issued from
time to time pursuant to this Section 14.1(g)(ii) to third
parties who are not Affiliates of the General Partner and (ii)
holding and receiving distributions on such Redeemed Preferred
Units where such Units are redeemed in exchange for preferred
stock of the General Partner having designations, preferences
and other rights substantially similar to the designations,
preferences and other rights of the Units so redeemed.
A non-consenting Preexisting Partner may consent in writing at any time
after the adoption of this Fourth Amended Agreement to the provisions
of this Fourth Amended Agreement, by delivering written notice of such
consent to the General Partner in such form as the General Partner may
require, and such consent shall be effective beginning on the first day
of January after the date that the General Partner receives such
consent. Once a consent is delivered hereunder, it may not be revoked.
If all Preexisting Partners consent to this Fourth Amended Agreement,
as promptly as practicable thereafter, the General Partner shall
provide written notice to the Limited Partners of such consent and of
the date(s) on which the provisions of this Section 14.1(g) shall cease
to have any effect. Any Limited Partner that consented to the Third
Amended Agreement shall be deemed to have irrevocably consented to this
Fourth Amended Agreement, such Limited Partner's consent shall be
included for purposes of determining the percentage of Preexisting
Partners who have consented to this Fourth Amended Agreement and no
further consent of such Limited Partner or of any Partner who is not a
Preexisting Partner is required for this Fourth Amended Agreement.
78
Section 14.2 Meetings of Limited Partners.
(a) General. Meetings of the Limited Partners may be called
only by the General Partner. Such meeting shall be held at the
principal office of the Partnership, or at such other place as may be
designated by the General Partner. Notice of any such meeting shall be
given to all Limited Partners not less than fifteen days nor more than
sixty days prior to the date of such meeting. The notice shall state
the purpose or purposes of the meeting. Limited Partners may vote in
person or by proxy at such meeting. Whenever the vote or consent of
Limited Partners is permitted or required under this Agreement, such
vote or consent may be given at a meeting of Limited Partners or may be
given in accordance with the procedure prescribed in Section 14.1
hereof. Except as otherwise expressly provided in this Agreement,
including without limitation Section 4.5(f)(ii), the Consent of the
Limited Partners shall be required.
(b) Actions Without a Meeting. Any action required or
permitted to be taken at a meeting of the Limited Partners may be taken
without a meeting if a written consent setting forth the action so
taken is signed by the Limited Partners holding the number and type of
Units that would be sufficient to approve the action if taken at a
meeting. Such consent may be in one instrument or in several
instruments, and shall have the same force and effect as a vote of such
Limited Partners at a meeting. Such consent shall be filed with the
General Partner. An action so taken shall be deemed to have been taken
at a meeting held on the effective date so certified.
(c) Proxy. Each Limited Partner may authorize any Person or
Persons to act for him by proxy on all matters in which a Limited
Partner is entitled to participate, including waiving notice of any
meeting, or voting or participating at a meeting. Every proxy must be
signed by the Limited Partner or his attorney-in-fact. No proxy shall
be valid after the expiration of 11 months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable at the
pleasure of the Limited Partner executing it.
(d) Conduct of Meeting. Each meeting of Limited Partners
shall be conducted by the General Partner or such other Person as the
General Partner may appoint pursuant to such rules for the conduct of
the meeting as the General Partner or such other Person deems
appropriate.
Article 15
General Provisions
Section 15.1 Addresses and Notice. All notices and demands under this
Agreement shall be in writing, and may be either delivered personally (which
shall include deliveries by courier) by U.S. mail or a nationally recognized
overnight courier, by telefax, telex or other wire transmission (with request
for assurance of receipt in a manner appropriate with respect to communications
of that type; provided, that a confirmation copy is concurrently sent by a
nationally recognized express courier for overnight delivery) or mailed, postage
prepaid, by
79
certified or registered mail, return receipt requested, directed to the parties
at their respective addresses set forth on Exhibit A attached hereto, as it may
be amended from time to time, and, if to the Partnership, such notices and
demands sent in the aforesaid manner must be delivered at its principal place of
business set forth above. Notices and demands shall be effective upon receipt.
Any party hereto may designate a different address to which notices and demands
shall thereafter be directed by written notice given in the same manner and
directed to the Partnership at its office hereinabove set forth.
Section 15.2 Titles and Captions. All article or section titles or
captions in this Agreement are for convenience only. They shall not be deemed
part of this Agreement and in no way define, limit, extend or describe the scope
or intent of any provisions hereof. Except as specifically provided otherwise,
references to "Articles" and "Sections" are to Articles and Sections of this
Agreement.
Section 15.3 Pronouns and Plurals. Whenever the context may require,
any pronoun used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and verbs
shall include the plural and vice versa.
Section 15.4 Further Action. The parties shall execute and deliver
all documents, provide all information and take or refrain from taking action as
may be necessary or appropriate to achieve the purposes of this Agreement.
Section 15.5 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their heirs, executors,
administrators, successors, legal representatives and permitted assigns. Section
14.1(f) shall inure to the benefit of Security Capital.
Section 15.6 Waiver of Partition. The Partners hereby agree that the
Partnership properties are not and will not be suitable for partition.
Accordingly, each of the Partners hereby irrevocably waives any and all rights
(if any) that it may have to maintain any action for partition of any of the
Partnership properties.
Section 15.7 Entire Agreement. This Agreement supersedes any prior
agreements or understandings among the parties with respect to the matters
contained herein and it may not be modified or amended in any manner other than
pursuant to Article 14. Matters (including but not limited to Redemption Rights)
affecting Additional Limited Partners who are admitted to the Partnership from
time to time may be set forth from time to time in separate agreements, provided
that such agreements would not require the consent of any other Limited Partners
if included as part of this Agreement, and in the event of any inconsistency
between this Agreement and any such separate agreement permitted hereunder, the
provisions of the separate agreement shall control.
Section 15.8 Remedies Not Exclusive. Any remedies herein contained
for breaches of obligations hereunder shall not be deemed to be exclusive and
shall not impair the right of any party to exercise any other right or remedy,
whether for damages, injunction or otherwise.
80
Section 15.9 Time. Time is of the essence of this Agreement.
Section 15.10 Creditors. None of the provisions of this Agreement
shall be for the benefit of, or shall be enforceable by, any creditor of the
Partnership.
Section 15.11 Waiver. No failure by any party to insist upon the
strict performance of any covenant, duty, agreement or condition of this
Agreement or to exercise any right or remedy consequent upon a breach thereof
shall constitute waiver of any such breach or any other covenant, duty,
agreement or condition.
Section 15.12 Execution Counterparts. This Agreement may be executed
in counterparts, all of which together shall constitute one agreement binding on
all the parties hereto, notwithstanding that all such parties are not
signatories to the original or the same counterpart.
Section 15.13 Applicable Law. This Agreement shall be construed in
accordance with and governed by the laws and judicial decisions of the State of
Delaware, without regard to the principles of conflicts of law.
Section 15.14 Invalidity of Provisions. If any provision of this
Agreement is or becomes invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not be affected thereby.
Article 16
Power Of Attorney
Section 16.1 Power of Attorney.
(a) Scope. Each Limited Partner and each Assignee hereby
constitutes and appoints the General Partner, any Liquidator,
and authorized officers and attorneys-in-fact of each, and
each of those acting singly, in each case with full power of
substitution and resubstitution, as its true and lawful agent
and attorney-in-fact, with full power and authority in its
name, place and stead to:
(i) execute, swear to, acknowledge, deliver, file and
record in the appropriate public offices (1) all
certificates, documents and other instruments (including,
without limitation, this Agreement and the Certificate and all
amendments or restatements thereof) that the General Partner or
the Liquidator deems appropriate or necessary to form, qualify
or continue the existence or qualification of the Partnership as
a limited partnership (or a partnership in which the limited
partners have limited liability) in the State of Delaware and in
all other jurisdictions in which the Partnership may conduct
business or own property; (2) all instruments that the General
Partner deems appropriate or necessary to reflect any amendment,
change, modification or restatement of this Agreement in
accordance with its terms; (3) all conveyances and other
instruments or documents that the General Partner deems
appropriate or
81
necessary to reflect the dissolution and liquidation of the
Partnership pursuant to the terms of this Agreement, including,
without limitation, a certificate of cancellation; (4) all
instruments or documents and all certificates and
acknowledgments relating to any mortgage, pledge, or other form
of encumbrance in connection with any loan or other financing to
the General Partner as provided by Section 7.1(a)(iii); (5) all
instruments relating to the admission, withdrawal, removal or
substitution of any Partner pursuant to, or other events
described in, Article 11, Article 12 or Article 13 hereof or the
Capital Contribution of any Partner; (6) all certificates,
documents and other instruments relating to the determination of
the rights, preferences and privileges of Partnership Interests;
and (7) all financing statements, continuation statements and
similar documents which the General Partner deems appropriate to
perfect and to continue perfection of the security interest
referred to in Section 5.3; and
(ii) execute, swear to, acknowledge and file all
ballots, consents, approvals, waivers, certificates and other
instruments appropriate or necessary, to evidence, confirm or
ratify any vote, consent, approval, agreement or other action
which is made or given by the Partners hereunder or is
consistent with the terms of this Agreement or appropriate or
necessary, to effectuate the terms or intent of this Agreement.
Nothing contained herein shall be construed as authorizing the General
Partner to amend this Agreement except in accordance with Article 14
hereof or as may be otherwise expressly provided for in this Agreement.
(b) Additional Power of Attorney of Limited Partners. Each
Additional Limited Partner hereby grants to the General Partner and any
Liquidator and authorizes officers and attorneys-in-fact of such
Persons, and each of those acting singly, in each case with full power
of substitution and resubstitution, as its true and lawful agent and
attorney-in-fact, with full power and authority in its name, place and
stead to execute and file in such Additional Limited Partner's name any
financing statements, continuation statements and similar documents and
to perform all other acts which the General Partner deems appropriate
to perfect and to continue perfection of the security interest in any
Pledged Units owned by such Additional Limited Partner.
(c) Irrevocability. The foregoing power of attorney is
hereby declared to be irrevocable and a power coupled with an interest,
in recognition of the fact that each of the Partners will be relying
upon the power of the General Partner and any Liquidator to act as
contemplated by this Agreement in any filing or other action by it on
behalf of the Partnership, and it shall survive and not be affected by
the subsequent Incapacity of any Limited Partner or Assignee and the
transfer of all or any portion of such Limited Partner's or Assignee's
Partnership Units and shall extend to such Limited Partner's or
Assignee's heirs, successors, assigns and personal representatives.
Each such Limited Partner or Assignee hereby agrees to be bound by any
representation made by the
82
General Partner, acting in good faith pursuant to such power of
attorney; and each such Limited Partner or Assignee hereby waives any
and all defenses which may be available to contest, negate or disaffirm
the action of the General Partner, taken in good faith under such power
of attorney. Each Limited Partner or Assignee shall execute and deliver
to the General Partner or the Liquidator, within 15 days after receipt
of the General Partner's request therefor, such further designations,
powers of attorney and other instruments as the General Partner or the
Liquidator, as the case may be, deems necessary to effectuate this
Agreement and the purposes of the Partnership.
83
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
GENERAL PARTNER:
REGENCY CENTERS CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Director
LIMITED PARTNERS
By Regency Centers Corporation,
Attorney-in-Fact for the Limited
Partners
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Director
84
Regency Centers, L.P.
Amendment No. 6 to Third Amended and Restated Agreement of
Limited Partnership
Relating to 8.75% Series F Cumulative Redeemable Preferred Units
This Amendment No. 6 (this "Amendment") to the Third Amended and
Restated Agreement of Limited Partnership, dated as of September 1, 1999 (as
amended through the date hereof, the "Partnership Agreement"), of Regency
Centers, L.P., a Delaware limited partnership (the "Partnership"), is made as of
the September 8, 2000, by Regency Realty Corporation, Inc., a Florida
corporation, as general partner (the "General Partner"), and the undersigned
Limited Partner that is being admitted to the Partnership on the date hereof
RECITALS
WHEREAS, the General Partner and the Limited Partner desire to amend
the Partnership Agreement to create a class of Preferred Units and to set forth
the rights, powers, duties and preferences of such Preferred Units.
NOW, THEREFORE, pursuant to the authority contained in Section 4.2(b)
of the Partnership Agreement, the General Partner hereby amends the Partnership
Agreement as follows:
A. Defined Terms. Capitalized terms used in this Amendment and not
otherwise defined herein shall have the meaning assigned thereto in the
Partnership Agreement.
B. Amendments. Effective as of the date hereof the Partnership
Agreement is hereby amended as follows:
Section 1. Amendments to Article 1 - Defined Terms. The following
terms are hereby added to Article 1 in their correct alphabetical order:
"Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under common control with
such Person. For the purposes of this definition, "control" when used
with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership
of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the
foregoing.
"Series F Excess Units" has the meaning set forth in Section
4.10(g)(i)(C).
"Series F Exchange Notice" has the meaning set forth in
Section 4.10(g)(ii)(A).
"Series F Exchange Price" has the meaning set forth in Section
4.10(g)(i)(A).
1
"Series F Preferred Partner" means the Limited Partner who
received Series F Preferred Units and also include any permitted
transferee of a Series F Preferred Partner pursuant to Section 11.3 and
the General Partner or any Affiliate of Regency upon exchange or
redemption of the Series F Preferred Units pursuant to Section 4.10.
"Series F Preferred Stock" has the meaning set forth in
Section 4.10(g)(i)(A).
"Series F Preferred Units" means the Partnership Interest in
the Partnership issued pursuant to Section 4.2 and Section 4.10 hereof
representing 8.75% Series F Cumulative Redeemable Preferred Units. The
term "Series F Preferred Unit" does not include or refer to any
Original Limited Partnership Units, Additional Units or Class B Units.
"Series F Preferred Unit Distribution Payment Date" has the
meaning set forth in Section 4.10(c)(i).
"Series F Preferred Unit Partnership Record Date" has the
meaning set forth in Section 4.10(c)(i).
"Series F Priority Return" means an amount equal to 8.75% per
annum, determined on the basis of a 360-day year of twelve 30-day
months (or actual days for any month which is shorter than a full
monthly period), cumulative to the extent not distributed for any given
distribution period, of the stated value of $100 per Series F Preferred
Unit, commencing on the date of issuance of such Series F Preferred
Unit.
"Series F Redemption Price" has the meaning set forth in
Section 4.10(e)(i).
Section 2. Section 4.1 - Capital Contributions of Partners Holding
Parity Preferred Units. Section 4.1(d) of the Partnership Agreement is hereby
deleted and the following inserted in lieu thereof:
"(d) (i) The Series A Preferred Partners have contributed cash to the
Partnership in the amount of $50 per Series A Preferred Unit. (ii) The
Series B Preferred Partners, Series C Preferred Partners, Series D
Preferred Partners, the Series E Preferred Partners and the Series F
Preferred Partner have each contributed cash to the Partnership in the
amount of $100 per Series B Preferred Unit, Series C Preferred Unit,
Series D Preferred Unit, the Series E Preferred Unit and Series F
Preferred Unit, respectively. The distribution rights for the Parity
Preferred Units shall be senior to the distribution rights of the
Original Limited Partnership Units, the Additional Units, Common Units,
the Class 2 Units and the Class B Units. The number of Parity Preferred
Units issued to the Series D Preferred Partners, the Series E Preferred
Partners and Series F Preferred Partner, respectively, are each set
forth on Exhibit A."
Section 3. Section 4.2 - Issuance of Additional Partnership
Interests.
2
(a) Section 4.2(a) is hereby amended by inserting the words
"and Section 4.10(f)(ii) and" after the reference to "Section 4.5
(f)(ii)" in the third sentence thereof.
(b) Section 4.2(b)(i) is hereby amended by inserting the words
"and Section 4.10(f)(ii) and" after the reference to "Section 4.5
(f)(ii)" in the first line thereof.
Section 4. Section 4.10 - Series F Preferred Units. The
Partnership Agreement is hereby amended by inserting the following as a new
Section 4.10:
"Section 4.10 Issuance of Series F Preferred Units.
(a) Designation and Number. A series of Partnership Units in
the Partnership designated as the "8.75%" Series F Cumulative
Redeemable Preferred Units (the "Series F Preferred Units") is hereby
established. The number of Series F Preferred Units shall be 240,000.
(b) Rank. The Series F Preferred Units will, with respect to
distributions and rights upon voluntary or involuntary liquidation,
winding-up or dissolution of the Partnership, rank senior to all
classes or series of Partnership Interests now or hereafter authorized,
issued or outstanding, other than the Series A Preferred Units, Series
B Preferred Units, Series C Preferred Units, Series D Preferred Units,
Series E Preferred Units and any class or series of equity securities
of the Partnership issued after the issuance of the Series F Preferred
Units and expressly designated in accordance with the Partnership
Agreement as ranking on a parity with or senior to the Series F
Preferred Units as to distributions or rights upon voluntary or
involuntary liquidation, winding-up or dissolution of the Partnership.
The Series F Preferred Units are expressly designated as ranking on a
parity with the Series A Preferred Units, the Series B Preferred Units,
the Series C Preferred Units, the Series D Preferred Units and the
Series B Preferred Units as to both distributions and rights upon
voluntary or involuntary liquidation, winding-up or dissolution of the
Partnership.
(c) Distributions.
(i) Payment of Distributions. Subject to the rights
of holders of Parity Preferred Units and any holders of
Partnership Interests issued after the date hereof in
accordance herewith ranking senior to the Series F Preferred
Units as to the payment of distributions, holders of Series F
Preferred Units shall be entitled to receive, when, as and if
declared by the Partnership acting through the General
Partner, out of Available Cash and Capital Transaction
Proceeds, cumulative preferential cash distributions at the
rate per annum of 8.75% of the original Capital Contribution
per Series F Preferred Unit. Such distributions shall be
cumulative, shall accrue from the original date of issuance
and will be payable (A) quarterly (such quarterly periods to
be the quarterly periods ending on the dates set forth in this
sentence) in arrears, on or before March 31, June 30,
September 30 and December 31 of each year, commencing on
September 30, 2000 (with the first such payment to include the
amount accrued from the period
3
commencing the date hereof and ending September 30, 2000) and,
(B) in the event of (i) an exchange of Series F Preferred
Units into Series F Preferred Stock, or (ii) a redemption of
Series F Preferred Units, on the exchange date or redemption
date, as applicable (each a" Series F Preferred Unit
Distribution Payment Date"). The amount of the distribution
payable for any period will be computed on the basis of a
360-day year of twelve 30-day months and for any period
shorter than a full quarterly period for which distributions
are computed, the amount of the distribution payable will be
computed on the basis of the ratio of the actual number of
days elapsed in such period to ninety (90) days. If any date
on which distributions are to be made on the Series F
Preferred Units is not a Business Day (as defined herein),
then payment of the distribution to be made on such date will
be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such
delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same
force and effect as if made on such date.
Distributions on September 30, 2000 and thereafter will be
made to the holders of record of the Series F Preferred Units
on the relevant record dates to be fixed by the Partnership
acting through the General Partner, which record dates shall
be not less than ten (10) days and not more than thirty (30)
Business Days prior to the relevant Preferred Unit
Distribution Payment Date (the "Series F Preferred Unit
Partnership Record Date").
(ii) Limitation on Distributions. No distribution on
the Series F Preferred Units shall be declared or paid or set
apart for payment by the Partnership at such time as the terms
and provisions of any agreement of the Partnership relating to
its indebtedness (other than any agreement with the holder of
Partnership Interests or an Affiliate thereof, prohibits such
declaration, payment or setting apart for payment or provide,
that such declaration, payment or setting apart for payment
would constitute a breach thereof or a default thereunder, or
if such declaration, payment or setting apart for payment
shall be restricted or prohibited by law. Nothing in this
Section 4.l0(c)(ii) shall be deemed to modify or in any manner
limit the provisions of Sections 4.10(c)(iii) or 4.10(c)(iv).
(iii) Distributions Cumulative. Distributions on the
Series F Preferred Units will accrue whether or not the terms
and provisions of any agreement of the Partnership, including
any agreement relating to its indebtedness, at any time
prohibit the current payment of distributions, whether or not
the Partnership has earnings, whether or not there are funds
legally available for the payment of such of such
distributions and whether or not such distributions are
authorized. Accrued but unpaid distributions on the Series F
Preferred Units will accumulate as of the Series F Preferred
Unit Distribution Payment Date on which they first become
payable. Distributions on account of arrears for any past
distribution periods may be declared and paid at any time,
without reference to a regular Series F Preferred Unit
Distribution Payment Date to holders of record of the
4
Series F Preferred Units on the record date fixed by the
Partnership acting through the General Partner which date
shall be not less than ten (10) days and not more than thirty
(30) Business Days prior to the payment date. Accumulated and
unpaid distributions will not bear interest.
(iv) Priority as to Distributions.
(A) So long as any Series F Preferred Units
are outstanding, no distribution of cash or other
property shall be authorized, declared, paid or set
apart for payment on or with respect to any class or
series of Junior Units with respect to distributions,
nor shall any cash or other property be set aside for
or applied to the purchase, redemption or other
acquisition for consideration of any Series F
Preferred Units, any Parity Preferred Units with
respect to distributions or any Junior Units, unless,
in each case, all distributions accumulated on all
Series F Preferred Units and all classes and series
of outstanding Parity Preferred Units as to the
payment of distributions have been paid in full.
Without limiting Section 4.10(f)(ii), the foregoing
sentence will not prohibit (a) distributions payable
solely in Junior Units, (b) the conversion of Junior
Units or Parity Preferred Units into Junior Units, or
(c) the redemption of Partnership Interests
corresponding to any Series F Preferred Stock, Parity
Preferred Stock or Junior Stock to be purchased by
the General Partner pursuant to Article 5 of the
Articles of Incorporation to preserve the General
Partner's status as a real estate investment trust,
provided that such redemption shall be upon the same
terms as the corresponding purchase pursuant to
Article 5 of the Articles of Incorporation.
(B) So long as distributions have not been
paid in full (or a sum sufficient for such full
payment is not irrevocably deposited in trust for
payment) upon the Series F Preferred Units, all
distributions authorized and declared on the Series F
Preferred Units and all classes or series of
outstanding Parity Preferred Units as to
distributions shall be authorized and declared so
that the amount of distributions authorized and
declared per Series F Preferred Unit and such other
classes or series of Parity Preferred Units shall in
all cases bear to each other the same ratio that
accrued distributions per Series F Preferred Unit and
such other classes or series of Parity Preferred
Units (which shall not include any accumulation in
respect of unpaid distributions for prior
distribution periods if such class or series of
Parity Preferred Units do not have cumulative
distribution rights) bear to each other.
(v) No Further Rights. Holders of Series F Preferred
Units shall not be entitled to any distributions, whether
payable in cash, other property or otherwise, in excess of the
full cumulative distributions described herein.
5
(d) Liquidation Preference.
(i) Payment of Liquidating Distributions. Subject to
the rights of holders of Parity Preferred Units with respect
to rights upon any voluntary or involuntary liquidation,
dissolution or winding-up of the Partnership and subject to
Partnership Interests ranking senior to the Series F Preferred
Units with respect to rights upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership, the
holders of Series F Preferred Units shall be entitled to
receive out of the assets of the Partnership legally available
for distribution or the proceeds thereof after payment or
provision for debts and other liabilities of the Partnership,
but before any payment or distributions of the assets shall be
made to holders of any class or series of Partnership Interest
that ranks junior to the Series F Preferred Units as to rights
upon liquidation, dissolution or winding-up of the
Partnership, an amount equal to the sum of a liquidation
preference equal to their positive Capital Account balances
(including, without limitation, any accumulated and unpaid
distributions, whether or not declared, to the date of payment
to the extent not previously credited to such Capital Account
balances), determined after taking into account all Capital
Account adjustments for the Partnership taxable year during
which the liquidation occurs (other than those made as a
result of the liquidating distribution set forth in this
4.10(d)(i)). In the event that, upon such voluntary or
involuntary liquidation, dissolution or winding-up, there are
insufficient assets to permit full payment of liquidating
distributions to the holders of Series F Preferred Units and
any Parity Preferred Units as to rights upon liquidation,
dissolution or winding-up of the Partnership, all payments of
liquidating distributions on the Series F Preferred Units and
such Parity Preferred Units shall be made so that the payments
on the Series F Preferred Units and such Parity Preferred
Units shall in all cases bear to each other the same ratio
that the respective rights of the Series F Preferred Units and
such other Parity Preferred Units (which shall not include any
accumulation in respect of unpaid distributions for prior
distribution periods if such Parity Preferred Units do not
have cumulative distribution rights) upon liquidation,
dissolution or winding-up of the Partnership bear to each
other.
(ii) Notice. Written notice of any such voluntary or
involuntary liquidation, dissolution or winding-up of the
Partnership, stating the payment date or dates when, and the
place or places where, the amounts distributable in such
circumstances shall be payable, shall be given by (i) fax and
(ii) by first class mail, postage pre-paid, not less than 30
and not more than 60 days prior to the payment date stated
therein, to each record holder of the Series F Preferred Units
at the respective addresses of such holders as the same shall
appear on the transfer records of the Partnership.
(iii) No Further Rights. After payment of the full
amount of the liquidating distributions to which they are
entitled, the holders of Series F Preferred Units will have no
right or claim to any of the remaining assets of the
Partnership.
6
(iv) Consolidation, Merger or Certain Other
Transactions. The voluntary sale, conveyance, lease, exchange
or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or
assets of the General Partner to, or the consolidation or
merger or other business combination of the Partnership with
or into, any corporation, trust or other entity (or of any
corporation, trust or other entity with or into the
Partnership) shall not be deemed to constitute a liquidation,
dissolution or winding-up of the Partnership.
(e) Optional Redemption.
(i) Right of Optional Redemption. The Series F
Preferred Units may not be redeemed prior to the fifth
anniversary of the issuance date. On or after such date, the
Partnership shall have the right to redeem the Series F
Preferred Units, in whole or in part, at any time or from time
to time, upon not less than 30 nor more than 60 days' written
notice, at a redemption price, payable in cash, equal to the
Capital Account balance of the holder of Series F Preferred
Units (the "Series F Redemption Price") provided, however,
that no redemption pursuant to this Section 4.l0(e)(i) will be
permitted if the Series F Redemption Price does not equal or
exceed the original Capital Contribution of such holder plus
the cumulative Series F Priority Return, whether or not
declared, to the redemption date to the extent not previously
distributed or distributed on the redemption date pursuant to
Section 4.l0(c)(i). If fewer than all of the outstanding
Series F Preferred Units are to be redeemed, the Series F
Preferred Units to be redeemed shall be selected pro rata (as
nearly as practicable without creating fractional units).
(ii) Limitation on Redemption.
(A) The Series F Redemption Price (other
than the portion thereof consisting of accumulated
but unpaid distributions) will be payable solely out
of the sale proceeds of capital stock of the General
Partner, which will be contributed by the General
Partner to the Partnership as additional capital
contribution, or out of the sale of limited partner
interests in the Partnership and from no other
source. For purposes of the preceding sentence,
"capital stock" means any equity securities
(including Common Stock and Preferred Stock (as such
terms are defined in the Articles of Incorporation)),
shares, participation or other ownership interests
(however designated) and any rights (other than debt
securities convertible into or exchangeable for
equity securities) or options to purchase any of the
foregoing.
(B) The Partnership may not redeem fewer
than all of the outstanding Series F Preferred Units
unless all accumulated and unpaid distributions have
been paid on all Series F Preferred Units for all
7
quarterly distribution periods terminating on or
prior to the date of redemption.
(iii) Procedures for Redemption.
(A) Notice of redemption will be (i) faxed,
and (ii) mailed by the Partnership, by certified
mail, postage prepaid, not less than 30 nor more than
60 days prior to the redemption date, addressed to
the respective holders of record of the Series F
Preferred Units at their respective addresses as they
appear on the records of the Partnership. No failure
to give or defect in such notice shall affect the
validity of the proceedings for the redemption of any
Series F Preferred Units except as to the holder to
whom such notice was defective or not given. In
addition to any information required by law, each
such notice shall state: (i) the redemption date,
(ii) the Series F Redemption Price, (iii) the
aggregate number of Series F Preferred Units to be
redeemed and if fewer than all of the outstanding
Series F Preferred Units are to be redeemed, the
number of Series F Preferred Units to be redeemed
held by such holder, which number shall equal such
holder's pro rata share (based on the percentage of
the aggregate number of outstanding Series F
Preferred Units the total number of Series F
Preferred Units held by such holder represents) of
the aggregate number of Series F Preferred Units to
be redeemed, (iv) the place or places where such
Series F Preferred Units are to be surrendered for
payment of the Series F Redemption Price, (v) that
distributions on the Series F Preferred Units to be
redeemed will cease to accumulate on such redemption
date and (vi) that payment of the Series F Redemption
Price will be made upon presentation and surrender of
such Series F Preferred Units.
(B) If the Partnership gives a notice of
redemption in respect of Series F Preferred Units
(which notice will be irrevocable) then, by 12:00
noon, New York City time, on the redemption date, the
Partnership will deposit irrevocably in trust for the
benefit of the Series F Preferred Units being
redeemed funds sufficient to pay the applicable
Series F Redemption Price and will give irrevocable
instructions and authority to pay such Series F
Redemption Price to the holders of the Series F
Preferred Units upon surrender of the Series F
Preferred Units by such holders at the place
designated in the notice of redemption. If the Series
F Preferred Units are evidenced by a certificate and
if fewer than all Series F Preferred Units evidenced
by any certificate are being redeemed, a new
certificate shall be issued upon surrender of the
certificate evidencing all Series F Preferred Units,
evidencing the unredeemed Series F Preferred Units
without cost to the holder thereof. On and after the
date of redemption, distributions will cease to
accumulate on the Series F Preferred Units or
portions thereof called for redemption, unless the
Partnership defaults in the payment thereof. If any
date fixed for redemption of Series F Preferred Units
is not a Business Day, then
8
payment of the Series F Redemption Price payable on such
date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment
in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such
payment will be made on the immediately preceding
Business Day, in each case with the same force and
effect as if made on such date fixed for redemption. If
payment of the Series F Redemption Price is improperly
withheld or refused and not paid by the Partnership,
distributions on such Series F Preferred Units will
continue to accumulate from the original redemption
date to the date of payment, in which case the actual
payment date will be considered the date fixed for
redemption for purposes of calculating the applicable
Series F Redemption Price.
(f) Voting Rights.
(i) General. Holders of the Series F Preferred Units
will not have any voting rights or right to consent to any
matter requiring the consent or approval of the Limited
Partners, except as otherwise expressly set forth in the
Partnership Agreement and except as set forth below.
(ii) Certain Voting Rights. So long as any Series F
Preferred Units remain outstanding, the Partnership shall not,
without the affirmative vote of the holders of at least
two-thirds of the Series F Preferred Units outstanding at the
time (i) authorize or create, or increase the authorized or
issued amount of, any class or series of Partnership Interests
ranking prior to the Series F Preferred Units with respect to
payment of distributions or rights upon liquidation,
dissolution or winding-up or create, authorize or issue any
obligations or security convertible into or evidencing the
right to purchase any such Partnership Interests, (ii)
authorize or create, or increase the authorized or issued
amount of any Parity Preferred Units or reclassify any
Partnership Interest of the Partnership into any such
Partnership Interest or create, authorize or issue any
obligations or security convertible into or evidencing the
right to purchase any such Partnership Interests but only to
the extent such Parity Preferred Units are issued to an
affiliate of the Partnership, other than to (1) Security
Capital U.S. Realty, Security Capital Holdings, S.A. or their
Affiliates (if issued upon arm's length terms in the good
faith determination of the board of directors of the General
Partner), or (2) the General Partner to the extent the
issuance of such interests was to allow the General Partner to
issue corresponding preferred stock to persons who are not
affiliates of the Partnership; or (iii) (A) consolidate, merge
into or with, or convey, transfer or lease its assets
substantially as an entirety to, any corporation or other
entity or (B) amend, alter or repeal the provisions of the
Partnership Agreement, whether by merger, consolidation or
otherwise, in a manner that would materially and adversely
affect the powers, special rights, preferences, privileges or
voting power of the Series F Preferred Units or the holders
thereof; provided, however, that with respect to a merger,
consolidation or a sale or lease of all of the Partnership's
assets as an entirety, so long as (a) the Partnership is the
9
surviving entity and the Series F Preferred Units remain
outstanding with the terms thereof unchanged, or (b) the
resulting, surviving or transferee entity is a partnership,
limited liability company or other pass-through entity
organized under the laws of any state and substitutes for the
Series F Preferred Units other interests in such entity having
substantially the same terms and rights as the Series F
Preferred Units, including with respect to distributions,
voting rights and rights upon liquidation, dissolution or
winding-up, then the occurrence of any such event shall not be
deemed to materially and adversely affect such rights.
privileges or voting powers of the holders of the Series F
Preferred Units and no vote of the Series F Preferred Units
shall be required in such case; and provided further that any
increase in the amount of Partnership Interests or the
creation or issuance of any other class or series of
Partnership Interests, in each case ranking (a) junior to the
Series F Preferred Units with respect to payment of
distributions and the distribution of assets upon liquidation,
dissolution or winding-up, or (b) on a parity to the Series F
Preferred Units with respect to payment of distributions or
the distribution of assets upon liquidation, dissolution or
winding-up to the extent such Partnership Interest are not
issued to an affiliate of the Partnership, other than (A)
Security Capital U.S. Realty, Security Capital Holdings, S.A.
or their Affiliates (if issued upon arm's length terms in the
good faith determination of the board of directors of the
General Partner), or (B) the General Partner to the extent the
issuance of such interests was to allow the General Partner to
issue corresponding preferred stock to persons who are not
affiliates of the Partnership, shall not be deemed to
materially and adversely affect such rights, preferences,
privileges or voting powers and no vote of the Series F
Preferred Units shall be required in such case.
(g) Exchange Rights.
(i) Right to Exchange.
(A) Series F Preferred Units will be
exchangeable in whole or in part at anytime on or
after the tenth anniversary of the date of issuance,
at the option of the holders thereof, for authorized
but previously unissued shares of 8.75% Series F
Cumulative Redeemable Preferred Stock of the General
Partner (the "Series F Preferred Stock") at an
exchange rate of one share of Series F Preferred
Stock for one Series F Preferred Unit, subject to
adjustment as described below (the "Series F Exchange
Price"), provided that the Series F Preferred Units
will become exchangeable at any time, in whole or in
part, at the option of the holders of Series F
Preferred Units for Series F Preferred Stock if (y)
at any time full distributions shall not have been
made on the applicable Series F Preferred Unit
Distribution Payment Date on any Series F Preferred
Unit with respect to six (6) prior quarterly
distribution periods, whether or not consecutive,
provided, however, that a distribution in respect of
Series F Preferred Units shall be considered timely
made if made within two (2) Business Days after the
applicable Series F Preferred Unit Distribution
10
Payment Date if at the time of such late payment
there shall not be any prior quarterly distribution
periods in respect of which full distributions were
made more than two (2) Business Days after the
applicable Series F Preferred Unit Distribution
Payment Date or (z) upon receipt by a holder or
holders of Series F Preferred Units of (A) notice
from the General Partner that the General Partner or
a Subsidiary of the General Partner has taken the
position that the Partnership is, or upon the
occurrence of a defined event in the immediate future
will be, a PTP and (B) an opinion rendered by an
outside nationally recognized independent counsel
familiar with such matters addressed to a holder or
holders of Series F Preferred Units, that the
Partnership is or likely is, or upon the occurrence
of a defined event in the immediate future will be or
likely will be, a PTP. In addition, the Series F
Preferred Units may be exchanged for Series F
Preferred Stock, in whole or in part, at the option
of any holder prior to the tenth anniversary of the
issuance date and after the third anniversary thereof
if such holder of a Series F Preferred Unit shall
deliver to the General Partner either (i) a private
ruling letter addressed to such holder of Series F
Preferred Units or (ii) an opinion of independent
counsel reasonably acceptable to the General Partner
based on the enactment of temporary or final Treasury
Regulations or the publication of a Revenue Ruling,
in either case to the effect that an exchange of the
Series F Preferred Units at such earlier time would
not cause the Series F Preferred Units to be
considered "stock and securities" within the meaning
of section 351(e) of the Code for purposes of
determining whether the holder of such Series F
Preferred Units is an "investment company" under
section 721(b) of the Code if an exchange is
permitted at such earlier date. Furthermore, the
Series F Preferred Units may be exchanged in whole
but not in part by any holder thereof which is a real
estate investment trust within the meaning of
Sections 856 through 859 of the Code for Series F
Preferred Stock (but only if the exchange in whole
may be accomplished consistently with the ownership
limitations set forth under Article 5 of the Articles
of Incorporation (taking into account exceptions
thereto) if at any time (i) the Partnership
reasonably determines that the assets and income of
the Partnership for a taxable year after 2001 would
not satisfy the income and assets tests of Section
856 of the Code for such taxable year if the
Partnership were a real estate investment trust
within the meaning of the Code or (ii) any such
holder of Series F Preferred Units shall deliver to
the Partnership and the General Partner an opinion of
independent counsel reasonably acceptable to the
General Partner to the effect that, based on the
assets and income of the Partnership for a taxable
year after 2001, the Partnership would not satisfy
the income and assets tests of Section 856 of the
Code for such taxable year if the Partnership were a
real estate investment trust within the meaning of
the Code and that such failure would create a
meaningful risk that a holder of the Series F
Preferred Units would fail to maintain qualification
as a real estate investment trust. Furthermore, the
Series F Preferred Units may be exchanged in whole or
11
in part for Series F Preferred Stock at any time
after the date hereof, if both (1) the holder thereof
concludes based on results or projected results that
there exits (in the reasonable judgment of the
holder) an imminent and substantial risk that the
holder's interest in the Partnership does or will
represent more than 19.5% of the total profits or
capital interests in the Partnership (determined in
accordance with Treasury Regulations Section 1.731
-2(e)(4)) for a taxable year, and (2) the holder
delivers to the General Partner an opinion of
nationally recognized independent counsel to the
effect that there is an imminent and substantial risk
that the holder's interest in the Partnership does or
will represent more than 19.5% of the total profits
or capital interests in the Partnership (determined
in accordance with Treasury Regulations Section
1.731-2(e)(4)) for a taxable year.
(B) Notwithstanding anything to the contrary
set forth in Section 4.10(g)(i)(A), if an Series F
Exchange Notice (as defined herein) has been
delivered to the General Partner, then the General
Partner may at its option, elect to redeem or cause
the Partnership to redeem all or a portion of the
outstanding Series F Preferred Units for cash in an
amount equal to the original Capital Contribution per
Series F Preferred Unit and all accrued and unpaid
distributions thereon to the date of redemption. The
General Partner may exercise its option to redeem the
Series F Preferred Units for cash pursuant to this
Section 4.l0(g)(i)(B) by giving each holder of record
of Series F Preferred Units notice of its election to
redeem for cash, within five (5) Business Days after
receipt of the Series F Exchange Notice, by (i) fax,
and (ii) registered mail, postage paid, at the
address of each holder as it may appear on the
records of the Partnership stating (i) the redemption
date, which shall be no later than sixty (60) days
following the receipt of the Series F Exchange
Notice, (ii) the redemption price, (iii) the place or
places where the Series F Preferred Units are to be
surrendered for payment of the redemption price, (iv)
that distributions on the Series F Preferred Units
will cease to accrue on such redemption date; (v)
that payment of the redemption price will be made
upon presentation and surrender of the Series F
Preferred Units and (vi) the aggregate number of
Series F Preferred Units to be redeemed, and if fewer
than all of the outstanding Series F Preferred Units
are to be redeemed, the number of Series F Preferred
Units to be redeemed held by such holder, which
number shall equal such holder's pro-rata share
(based on the percentage of the aggregate number of
outstanding Series F Preferred Units the total number
of Series F Preferred Units held by such holder
represents) of the aggregate number of Series F
Preferred Units being redeemed.
(C) Upon the occurrence of an event giving
rise to exchange rights pursuant to Section
4.l0(g)(i)(A), in the event an exchange of all or a
portion of Series F Preferred Units pursuant to
Section 4.10(g)(i)(A) would violate the provisions on
ownership limitation of the General
12
Partner set forth in Article 5 of the Articles of
Incorporation, the General Partner shall give written
notice thereof to each holder of record of Series F
Preferred Units, within five (5) Business Days following
receipt of the Series F Exchange Notice, by (i) fax, and
(ii) registered mail, postage prepaid, at the address of
each such holder set forth in the records of the
Partnership. In such event, each holder of Series F
Preferred Units shall be entitled to exchange, pursuant
to the provision of Section 4.10(g)(ii) a number of
Series F Preferred Units which would comply with the
provisions on the ownership limitation of the General
Partner set forth in such Article 5 of the Articles of
Incorporation and any Series F Preferred Units not so
exchanged (the "Series F Excess Units") shall be
redeemed by the Partnership for cash in an amount equal
to the original Capital Contribution per Series F Excess
Unit, plus any accrued and unpaid distributions thereon,
whether or not declared, to the date of redemption. The
written notice of the General Partner shall state (i)
the number of Series F Excess Units held by such holder,
(ii) the redemption price of the Series F Excess Units,
(iii) the date on which such Series F Excess Units shall
be redeemed, which date shall be no later than sixty
(60) days following the receipt of the Series F Exchange
Notice, (iv) the place or places where such Series F
Excess Units are to be surrendered for payment of the
Series F Redemption Price, (iv) that distributions on
the Series F Excess Units will cease to accrue on such
redemption date, and (v) that payment of the redemption
price will be made upon presentation and surrender of
such Series F Excess Units. In the event an exchange
would result in Series F Excess Units, as a condition to
such exchange, each holder of such units agrees to
provide representations and covenants reasonably
requested by the General Partner relating to (i) the
widely held nature of the interests in such holder,
sufficient to assure the General Partner that the
holder's ownership of stock of the General Partner
(without regard to the limits described above) will not
cause any individual to own in excess of 9.8% of the
stock of the General Partner; and (ii) to the extent
such holder can so represent and covenant without
obtaining information from its owners, the holder's
ownership of tenants of the Partnership and its
affiliates.
(D) The redemption of Series F Preferred
Units described in Section 4.10(g)(i)(B) and (C)
shall be subject to the provisions of Section
4.l0(e)(ii)(A) and Section 4.10(e)(iii)(B); provided,
however, that for purposes hereof the term
"Redemption Price" in Sections 4.10(e)(ii)(A) and
4.10(e)(iii)(B) shall be read to mean the original
Capital Contribution per Series F Preferred Unit
being redeemed plus all accrued and unpaid
distributions to the redemption date.
13
(ii) Procedure for Exchange.
(A) Any exchange shall be exercised pursuant
to a notice of exchange (the "Series F Exchange
Notice") delivered to the General Partner by the
holder who is exercising such exchange right, by (i)
fax and (ii) by certified mail postage prepaid. Upon
request of the General Partner, such holder
delivering the Series F Exchange Notice shall provide
to the General Partner in writing such information as
the General Partner may reasonably request to
determine whether any portion of the exchange by the
delivering holder will result in the violation of the
restrictions of Article 5 of the Articles of
Incorporation, including the Ownership Limit and the
Related Tenant Limit. The exchange of Series F
Preferred Units, or a specified portion thereof, may
be effected after the fifth (5th) Business Days
following receipt by the General Partner of the
Series F Exchange Notice and such requested
information by delivering certificates, if any,
representing such Series F Preferred Units to be
exchanged together with, if applicable, written
notice of exchange and a proper assignment of such
Series F Preferred Units to the office of the General
Partner maintained for such purpose. Currently, such
office is 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxxxx, Xxxxxxx 00000. Each exchange will be
deemed to have been effected immediately prior to the
close of business on the date on which such Series F
Preferred Units to be exchanged (together with all
required documentation) shall have been surrendered
and notice shall have been received by the General
Partner as aforesaid and the Series F Exchange Price
shall have been paid. Any Series F Preferred Stock
issued pursuant to this Section 4.10(g) shall be
delivered as shares which are duly authorized,
validly issued, fully paid and nonassessable, free of
pledge, lien, encumbrance or restriction other than
those provided in the Articles of Incorporation, the
Bylaws of the General Partner, the Securities Act and
relevant state securities or blue sky laws.
(B) In the event of an exchange of Series F
Preferred Units for shares of Series F Preferred
Stock, an amount equal to the accrued and unpaid
distributions which are not paid pursuant to Section
4(a) hereof, whether or not declared, to the date of
exchange on any Series F Preferred Units tendered for
exchange shall (i) accrue and be payable by the
General Partner from and after the date of exchange
on the shares of the Series F Preferred Stock into
which such Series F Preferred Units are exchanged.
and (ii) continue to accrue on such Series F
Preferred Units, which shall remain outstanding
following such exchange, with the General Partner as
the holder of such Series F Preferred Units.
Notwithstanding anything to the contrary set forth
herein, in no event shall a holder of a Series F
Preferred Unit that was validly exchanged into Series
F Preferred Stock pursuant to this section (other
than the General Partner now holding such Series F
Preferred Unit), receive a distribution out of
Available Cash or Capital Transaction Proceeds of the
Partnership with respect to any Series F Preferred
Units so exchanged.
14
(C) Fractional shares of Series F Preferred
Stock are not to be issued upon exchange but, in lieu
thereof, the General Partner will pay a cash
adjustment based upon the fair market value of the
Series F Preferred Stock on the day prior to the
exchange date as determined in good faith by the
Board of Directors of the General Partner.
(iii) Adjustment of Exchange Price.
(A) The Series F Exchange Price is subject
to adjustment upon certain events, including, (i)
subdivisions, combinations and reclassification of
the Series F Preferred Stock, and (ii) distributions
to all holders of Series F Preferred Stock of
evidences of indebtedness of the General Partner or
assets (including securities, but excluding dividends
and distributions paid in cash out of equity
applicable to Series F Preferred Stock).
(B) In case the General Partner shall be a
party to any transaction (including, without
limitation, a merger, consolidation, statutory share
exchange, tender offer for all or substantially all
of the General Partner's capital stock or sale of all
or substantially all of the General Partner's
assets), in each case as a result of which the Series
F Preferred Stock will be converted into the right to
receive shares of capital stock, other securities or
other property (including cash or any combination
thereof), each Series F Preferred Unit will
thereafter be exchangeable into the kind and amount
of shares of capital stock and other securities and
property receivable (including cash or any
combination thereof) upon the consummation of such
transaction by a holder of that number of shares of
Series F Preferred Stock or fraction thereof into
which one Series F Preferred Unit was exchangeable
immediately prior to such transaction. The General
Partner may not become a party to any such
transaction unless the terms thereof are consistent
with the foregoing.
(C) So long as a Preferred Partner or any of
its permitted successors or assigns holds any Series
F Preferred Units as the case may be, the General
Partner shall not, without the affirmative vote of
the holders of at least two-thirds of the Series F
Preferred Units (excluding any Series F Preferred
Units surrendered to the General Partner in exchange
for Series F Preferred Stock) and Series F Preferred
Stock (voting together as a class on the basis of
number of shares into which Series F Preferred Units
are exchangeable) outstanding at the time: (a)
designate or create, or increase the authorized or
issued amount of, any class or series of shares
ranking senior to the Series F Preferred Stock with
respect to the payment of distributions or rights
upon liquidation, dissolution or winding-up or
reclassify any authorized shares of the General
Partner into any such shares, or create, authorize or
issue any
15
obligations or securities convertible into or evidencing
the right to purchase any such shares; (b) designate or
create, or increase the authorized or issued amount of,
any Parity Preferred Stock or reclassify any authorized
shares of the General Partner into any such shares, or
create, authorize or issue any obligations or security
convertible into or evidencing the right to purchase any
such shares, but only to the extent that such Parity
Preferred Stock are issued to an Affiliate of the
General Partner other than (A) Security Capital U.S.
Realty, Security Capital Holdings, S.A. or their
affiliates (if issued on arm's length terms in the good
faith determination of the board of directors of the
General Partner), or (B) the General Partner to the
extent the issuance of such interests was to allow the
General Partner to issue corresponding preferred stock
in the same transaction to persons who are not
affiliates of the Partnership; (c) amend, alter or
repeal the provisions of the Charter or bylaws of the
General Partner, whether by merger, consolidation or
otherwise, that would materially and adversely affect
the powers, special rights, preferences, privileges or
voting power of the Series F Preferred Stock or the
holders thereof; provided, however, that any increase in
the amount of authorized Preferred Stock or the creation
or issuance of any other series or class of Preferred
Stock, or any increase in the amount of authorized
shares of each class or series, in each case ranking
either (1) junior to the Series F Preferred Stock with
respect to the payment of distributions or the
distribution of assets upon liquidation, dissolution or
winding-up, or (2) on a parity with the Series F
Preferred Stock with respect to the payment of
distributions or the distribution of assets upon
liquidation, dissolution or winding-up to the extent
such Preferred Stock are not issued to an Affiliate of
the General Partner other than (A) Security Capital U.S.
Realty, Security Capital Holdings, S.A. or their
affiliates if issued on arm's length terms in the good
faith determination of the board of directors of the
General Partner, or (B) General Partner to the extent
the issuance of such interests was to allow the General
Partner to issue corresponding preferred stock to
persons who are not affiliates of the Partnership, shall
not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers.
(h) No Conversion Rights. The holders of the Series F
Preferred Units shall not have any rights to convert such shares into
shares of any other class or series of stock or into any other
securities of, or interest in, the Partnership.
(i) No Sinking Fund. No sinking fund shall be established
for the retirement or redemption of Series F Preferred Units."
Section 5. Article 7 - Management and Operating of Business.
Section 7.1(h) is hereby amended by inserting the words " and Series F Priority
Return and" before the words "Priority Distribution Amount" therein.
16
Section 6. Article 8 - Rights and Obligations of Limited Partner.
Section 8.4 is hereby amended by inserting the words "and Section 4.10," after
the words "Section 4.8".
Section 7. Article 11 - Transfers and Withdrawals.
(a) Section 11.2(b) is hereby amended by inserting the words
"and Section 4.10(f)" after the words "4.8(f)" in the first sentence
thereof.
(b) The Series F Preferred Partner may, subject to Sections
11.3(b)-(n), assign its Units to any Person, and any such assignee
shall be admitted as a Substituted Limited Partner.
(c) The following is inserted as a new Section 11.3(n):
"(k) Transfers by Series F Preferred Partner. In
addition to the other restrictions on transfer set forth in
this Article 11, which apply to Series F Preferred Units, no
transfer of the Series F Preferred Units may be made without
the consent of the General Partner, which consent may be given
or withheld in its sole and absolute discretion, if such
transfer would result in more than four partners holding all
outstanding Series F Preferred Units within the meaning of
Regulation Section 1.7704-1(h)(3) "; provided, however, that
the General Partner shall not unreasonably withhold its
consent to a waiver of the limitations set forth in this
Section 11.3(n) if the Partnership is (1) relying on a
provision other than Treasury Regulation Section 1.7704-1(h)
to avoid classification of Partnership as a PTP or (2) a PTP."
Section 8. Article 13 - Dissolution and Liquidation.
(a) Clause (iii) of Section 13.2(a) is hereby deleted and
the following inserted in lieu thereof:
"(iii) Third, one hundred percent (100%) to the Parity
Preferred Units in accordance with Sections 4.5(d), 4.6(d),
4.7(d), 4.8(d), 4.9(d) and 4.10(d)."
(b) The words "and Section 4.10 with respect to the Series F
Preferred Units" is hereby inserted after the words "Section 4.5 with
respect to the Series A Preferred Units" in Section 13.6.
Section 9. Article 14 - Amendment of Partnership Agreement;
Meetings. Sections 14.1(a), 14.1(c) and 14.1(d) are hereby amended by inserting
the words "and 4.10(f)(ii)" after each reference to "4.5(f)(ii)" therein.
Section 10. Miscellaneous.
(a) Notwithstanding anything to the contrary contained in
Section 8.6 of the Partnership Agreement, in no event shall the rights
of the holders of the Series F
17
Preferred Units set forth in Section 4 of this Amendment be subordinate
to the Redemption Rights set forth in Section 8.6 of the Partnership
Agreement.
(b) The Partnership and the General Partner represent and
warrant that the issuance of the Series F Preferred Units pursuant to
this Amendment is permitted pursuant to Section 4.2(b)(i).
(c) The Partnership and General Partner (i) represent and
warrant that, except as disclosed on Schedule 1 attached hereto, no
Redemption Rights contemplated in Section 8.6 require the Partnership
or General Partner to pay cash in lieu of the Share Amount in exchange
for Units (other than at the election of the Partnership or General
Partner) and (ii) covenant and agree not to grant, without the consent
of the Series A Preferred Partners and Series F Preferred Partner, any
Redemption Rights requiring the Partnership or General Partner to pay
cash in lieu of the Share Amount in exchange for Units (other than at
the election of the Partnership or General Partner) except (i)
redemption rights assumed by Partnership or General Partner in
connection with the acquisition of an existing operating partnership
and (ii) redemption rights as to less than 5% of the Common Units
arising from a tender offer by the Partnership intended to reduce the
number of partners of the Partnership, unless (i) the cash used to
effectuate any such cash redemption is raised from the issuance of
Common Stock of the General Partner issued for such purpose or (ii) the
Partnership shall allow the holders of the Series A Preferred Units and
Series F Preferred Units to redeem their Units for the Series A
Redemption Price and Series F Redemption Price, respectively,
immediately prior to the time of such other redemption.
Section 11. Fourth Amended and Restated Agreement of Limited
Partnership. The form of Fourth Amended and Restated Agreement of Limited
Partnership (the "Restated Form") attached to the Partnership Agreement is
hereby amended to conform to the amendments set forth in this Amendment, all of
which shall be deemed incorporated in said Fourth Amended and Restated Agreement
of Limited Partnership (the "Restated Agreement") upon the effectiveness thereof
(with such conforming changes as may be necessary to give substantive effect
thereto). Additionally, the Restated Agreement Form and, upon its effectiveness,
the Restated Agreement are hereby amended as follows:
(a) Section 4.2(b)(i)(A) is hereby amended by inserting the
words "and Section 4.10(f)(ii)" after the words "subject to Sections
4.5(f)(ii) and 4.8(f)(ii)," at the beginning of clause (ii);
(b) Section 4.2(b)(i)(B) is hereby amended by inserting the
words "and Section 4.l0(f)(ii)" after the words "and Sections
4.5(f)(ii) and 4.8(f)(ii) after the reference to "Section 14.1(g)(ii)"
in clause (ii); and
(c) Section 14.1(g) is hereby amended by inserting the
following at the end thereof:
18
"Nothing contained in Section 14(g) shall be deemed to modify
or affect the rights, preferences and priorities of the Series
F Preferred Partner as to distributions and allocations.
Section 12. Reaffirmation. Except as modified herein, all terms and
conditions of the Partnership Agreement shall remain in full force and effect,
which terms and conditions the General Partner hereby ratifies and affirms.
(SPACE LEFT INTENTIONALLY BLANK)
19
IN WITNESS WHEREOF, this Amendment has been executed as of the date
first above written.
GENERAL PARTNER
REGENCY REALTY CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Director and
Executive Vice President
LIMITED PARTNER
MONTEBELLO REALTY CORP.
By: /s/ J. Xxxxxxx Xxxx
-------------------------------------
Name: J. Xxxxxxx Xxxx
Title: V. P.
20
SIGNATURE PAGES TO AMENDMENT NO. 6 TO
REGENCY CENTERS, L.P. AGREEMENT OF LIMITED PARTNERSHIP
GENERAL PARTNER
Regency Realty Corporation
By:
-------------------------------------
CONTRIBUTOR
By: ____________________________________
Name:___________________________________
Title: _________________________________
SECURITY CAPITAL U.S. REALTY
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Manager
SECURITY CAPITAL HOLDINGS S.A.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Manager
ARDEN SQUARE HOLDINGS SARL
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Manager
BLOSSOM VALLEY HOLDINGS SARL
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Manager
XXXXXX STREET PLAZA HOLDINGS SARL
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Manager
DALLAS HOLDINGS SARL
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Manager
EL CAMINO HOLDINGS SARL
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Manager
FRIARS MISSION HOLDINGS SARL
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Manager
SCHEDULE 1
----------
None.
REGENCY CENTERS, L.P.
Amendment No. 5 to Third Amended and Restated
Agreement of Limited Partnership (the "Partnership Agreement")
Section 1. Definitions. Capitalized terms used and not otherwise
defined herein shall have the meaning assigned to them in the Partnership
Agreement.
Section 2. Amendment Regarding Preferred Units. Section 4.2(b) of
the Partnership Agreement is hereby amended to read in full as follows (new
language is double underscored and deleted language is stricken through):
"(b) Consent Granted by Limited Partners for Certain
Issuances. Pursuant to Section 4.2(a), the Consent of Limited Partners
holding Original Limited Partnership Units and the Consent of Limited
Partners holding Additional Units has been obtained for, and no further
Consent of the Limited Partners or of any class of Limited Partners
shall be required for, the issuance of additional Units from time to
time as follows:
(i) Issuance of Preferred Units. Subject to Sections
4.5(f)(ii), 4.6(f)(ii), 4.7(f)(ii), 4.8(f)(ii) and 4.9(f)(ii),
Preferred Units may be issued to any Limited Partner if, as a
result of such issuance and the application of the proceeds
therefrom, the sum of (i) the aggregate liquidation preference
of all outstanding Preferred Units entitled to priority upon
liquidation and (ii) the Partnership's gross sales price of
outstanding Preferred Units entitled to priority only with
respect to distributions of Available Cash would not exceed
twenty thirty percent (230%) of the Partnership's book value
before depreciation and amortization as of the end of the
calendar quarter preceding the date of issuance, determined in
accordance with generally accepted accounting principles.
Nothing in this Section 4.2(b)(i) shall be construed to
prohibit the General Partner from (i) redeeming Series A
Preferred Units or other Preferred Units issued from time to
time pursuant to this Section 4.2(b)(i) to third parties who
are not Affiliates of the General Partner and (ii) holding and
receiving distributions on such Redeemed Preferred Units where
such Units are redeemed in exchange for preferred stock of the
General Partner having designations, preferences and other
rights substantially similar to the designations, preferences
and other rights of the Units so redeemed."
Section 3. Counterparts. This Amendment may be executed in one or
more counterparts, all of which shall constitute one and the same agreement.
Section 4. Effective Date. This Amendment shall be effective as of
September 7, 2000.
GENERAL PARTNER
Regency Realty Corporation
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxx
Its Managing Director and Executive
Vice President
SECURITY CAPITAL U.S. REALTY
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Manager
SECURITY CAPITAL HOLDINGS S.A.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Manager
ARDEN SQUARE HOLDINGS SARL
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Manager
BLOSSOM VALLEY HOLDINGS SARL
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Manager
0
XXXXXX XXXXXX XXXXX HOLDINGS SARL
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Manager
DALLAS HOLDINGS SARL
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Manager
EL CAMINO HOLDINGS SARL
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Manager
FRIARS MISSION HOLDINGS SARL
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Manager
3
Regency Centers, L.P.
Amendment No. 4 to Third Amended and Restated Agreement of
Limited Partnership (the "Partnership Agreement")
Relating to 8.75% Series E Cumulative Redeemable Preferred Units
Section 1. Definitions. Capitalized terms used and not otherwise
defined herein shall have the meaning assigned thereto in the Partnership
Agreement. For purposes of this Amendment the term "Series E Limited Partner"
shall mean a Limited Partner holding Series E Preferred Units. The term "Parity
Preferred Units" shall be used to refer to Series A Preferred Units, Series B
Preferred Units, Series C Preferred Units, Series D Preferred Units (as
hereafter defined) and any class or series of Partnership Interests of the
Partnership now or hereafter authorized, issued or outstanding expressly
designated by the Partnership to rank on a parity with Series A Preferred Units
or Series B Preferred Units with respect to distributions or rights upon
voluntary or involuntary liquidation, winding-up or dissolution of the
Partnership, or both, as the context may require, whether or not the dividend
rates, dividend payment dates or redemption or liquidation prices per unit or
conversion rights or exchange rights shall be different from those of the Series
A Preferred Units. The term "Series E Priority Return" shall mean, an amount
equal to 8.75% per annum, determined on the basis of a 360 day year of twelve 30
day months (or actual days for any month which is shorter than a full monthly
period), cumulative to the extent not distributed for any given distribution
period, of the stated value of $100.00 per Series E Preferred Unit, commencing
on the date of issuance of such Series E Preferred Unit. The Partnership
Agreement shall be amended to add such definitions, and shall be further amended
to add the following definition: "Priority Returns" means the Series A Priority
Return, the Series B Priority Return, the Series C Priority Return, Series D
Priority Return or similar amount payable with respect to any other Parity
Preferred Units. The term "Junior Stock" means any class or series of capital
stock of the General Partner ranking junior as to the payment of distributions
or rights upon voluntary or involuntary liquidation, winding up or dissolution
of the General Partner to the Series E Preferred Stock or other Parity Preferred
Shares. The term "PTP" shall mean a "publicly traded partnership" within the
meaning of Section 7704 of the Code (as hereafter defined). The final Paragraph
in the definition of "Net Income" and "Net Loss" in the Partnership Agreement
shall be restated in its entirety as follows (new language is underscored):
"Solely for purposes of allocating Net Income or Net Loss in
any Fiscal Year to the holders of the Parity Preferred Units,
items of Net Income and Net Loss, as the case may be, shall
not include Depreciation with respect to properties (or
groupings of properties selected by the General Partner using
any method determined by it to be reasonable) that are
"ceiling limited" in respect of the holders of the Parity
Preferred Units. For purposes of the preceding sentence,
Partnership property shall be considered ceiling limited in
respect of a holder of Parity Preferred Units if Depreciation
attributable to such Partnership property which would
otherwise be allocable to such Partner, without regard to this
paragraph, exceeded depreciation
determined for federal income tax purposes attributable to
such Partnership property which would otherwise be allocated
to such Partner by more than 5%."
Section 2. Designation and Number. A series of Partnership Units in
the Partnership designated as the "8.75% Series E Cumulative Redeemable
Preferred Units" (the "Series E Preferred Units") is hereby established. The
number of Series E Preferred Units shall be 700,000.
Section 3. Rank.
(a) The Series E Preferred Units will, with respect to
distributions or rights upon voluntary or involuntary liquidation, winding-up or
dissolution of the Partnership, or both, rank senior to all classes or series of
Partnership Interests now or hereafter authorized, issued or outstanding other
than any class or series of equity securities of the Partnership issued after
the issuance of the Series E Preferred Units and expressly designated in
accordance with the Partnership Agreement as ranking on a parity with the Series
E Preferred Units as to distributions or rights upon voluntary or involuntary
liquidation, winding-up or dissolution of the Partnership, or both. The Series E
Preferred Units are expressly designated as ranking on a parity with the Series
A Preferred Units, the Series B Preferred Units, Series C Preferred Units and
Series D Preferred Units.
(b) The last sentence of Section 4.1(a) of the Partnership
Agreement shall be amended to read in full as follows (new language is
underscored):
Any Partnership Interests held by the General Partner or any
Affiliate other than a Property Affiliate (including
Partnership Interests acquired under Sections 4.2, 8.6 and
8.7) shall be Class B Units, other than Parity Preferred
Units, the issuance of which has been approved by the Limited
Partners pursuant to Section 4.2, and any Preferred Units
issued pursuant to Section 4.2(b)(i).
Section 4. Distributions.
(a) Payment of Distributions. Subject to the rights of
holders of Parity Preferred Units, holders of Series E Preferred Units shall be
entitled to receive, out of Available Cash and Capital Transaction Proceeds,
cumulative preferential cash distributions at the rate per annum of 8.75% of the
original Capital Contribution per Series E Preferred Unit. Such distributions
shall be cumulative, shall accrue from the original date of issuance and will be
payable in cash when, as and if declared by the Partnership acting through the
General Partner, (A) quarterly in arrears, on or before March 31, June 30,
September 30 and December 31 of each year commencing on June 30, 2000 and (B) in
the event of (i) an exchange of Series E Preferred Units into Series E Preferred
Stock, or (ii) a redemption of Series E Preferred Units, on the exchange date or
redemption date, as applicable (each a "Series E Preferred Unit Distribution
Payment Date"). The amount of the distribution payable for any period will be
computed on the basis of a 360-day year of twelve 30-day
2
months and for any period shorter than a full quarterly period for which
distributions are computed, the amounts of the distribution payable will be
computed based on the ratio of the actual number of days elapsed in the
quarterly period to ninety (90) days. If any date on which distributions are to
be made on the Series E Preferred Units is not a Business Day (as defined
herein), then payment of the distribution to be made on such date will be made
on the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay) except that, if such Business Day is
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date. Distributions on the Series E Preferred Units will be
made to the holders of record of the Series E Preferred Units on the relevant
record dates to be fixed by the Partnership acting through the General Partner,
which record dates shall be not less than ten (10) days and not more than thirty
(30) Business Days prior to the relevant Preferred Unit Distribution Payment
Date (the "Series E Preferred Unit Partnership Record Date").
The term "Business Day" shall mean each day, other than a Saturday or a
Sunday, which is not a day on which banking institutions in New York, New York
are authorized or required by law, regulation or executive order to close.
(b) Distributions Cumulative. Distributions on the Series E
Preferred Units will accrue whether or not the terms and provisions of any
agreement of the Partnership, including any agreement relating to its
indebtedness at any time prohibit the current payment of distributions, whether
or not the Partnership has earnings, whether or not there are funds legally
available for the payment of such distributions and whether or not such
distributions are authorized or declared. Accrued but unpaid distributions on
the Series E Preferred Units will accumulate as of the Series E Preferred Unit
Distribution Payment Date on which they first become payable. Distributions on
account of arrears for any past distribution periods may be declared and paid at
any time, without reference to a regular Series E Preferred Unit Distribution
Payment Date to holders of record of the Series E Preferred Units on the record
date fixed by the Partnership acting through the General Partner which date
shall be not less than ten (10) days and not more than thirty (30) Business Days
prior to the payment date. Accumulated and unpaid distributions will not bear
interest.
(c) Priority as to Distributions.
(i) So long as any Series E Preferred Units are
outstanding, no distribution of cash or other property shall be authorized,
declared, paid or set apart for payment on or with respect to any class or
series of Partnership Interests of the Partnership ranking junior as to the
payment of distributions to Parity Preferred Units (collectively, "Junior
Units"), nor shall any cash or other property be set aside for or applied to the
purchase, redemption or other acquisition for consideration of any Series E
Preferred Units, any Parity Preferred Units with respect to distributions or any
Junior Units, unless, in each case, all distributions accumulated on all Series
E Preferred Units and all classes and series of outstanding Parity Preferred
Units as to payment of distributions have been paid in full. The foregoing
sentence will not prohibit (a) distributions payable solely in Junior Units, (b)
the
3
conversion of Junior Units or Parity Preferred Units into Partnership Interests
of the Partnership ranking junior to the Series E Preferred Units as to
distributions, or (c) the redemption of Partnership Interests corresponding to
any Series E Preferred Stock, Parity Preferred Stock with respect to
distributions or Junior Stock to be purchased by the General Partner pursuant to
Article 5 of the Articles of Incorporation of the General Partner (the
"Charter") to preserve the General Partner's status as a real estate investment
trust, provided that such redemption shall be upon the same terms as the
corresponding purchase pursuant to Article 5 of the Charter.
(ii) So long as distributions have not been paid in
full (or a sum sufficient for such full payment is not irrevocably deposited in
trust for payment) upon the Series E Preferred Units, all distributions
authorized and declared on the Series E Preferred Units and all classes or
series of outstanding Parity Preferred Units with respect to distributions shall
be authorized and declared so that the amount of distributions authorized and
declared per Series E Preferred Unit and such other classes or series of Parity
Preferred Units shall in all cases bear to each other the same ratio that
accrued distributions per Series E Preferred Unit and such other classes or
series of Parity Preferred Units (which shall not include any accumulation in
respect of unpaid distributions for prior distribution periods if such classes
or series of Parity Preferred Units do not have cumulative distribution rights)
bear to each other.
(d) No Further Rights. Holders of Series E Preferred Units
shall not be entitled to any distributions, whether payable in cash, other
property or otherwise, in excess of the full cumulative distributions described
herein.
(e) Section 5.1(c) of the Partnership Agreement shall be
amended to read in full as follows (new language is underscored):
"Anything herein to the contrary notwithstanding, subject to
Section 4(c)(i) of Amendment No. 4 to this Agreement, no
Available Cash or Capital Transaction Proceeds shall be
distributed pursuant to Section 5.1(a), Section 5.1(b) or any
other provisions of this Article 5 unless all distributions
accumulated on all Series A Preferred Units pursuant to
Section 4.5 have been paid in full and unless all
distributions accumulated on any other outstanding Preferred
Units have been paid in full."
Section 5. Allocations.
(a) Section 6.1(a) and 6.1(b) of the Agreement are hereby
deleted and the following inserted as new Sections 6.1(a) and 6.1(b) in lieu
thereof (new language is underscored):
Section 6.1 Allocations of Net Income and Net Loss. For
purposes of maintaining the Capital Accounts and in determining the
rights of the Partners among
4
themselves, the Partnership's Net Income and Net Loss shall be
allocated among the Partners for each taxable year (or portion thereof)
as provided herein below.
(a) Net Income. After giving effect to the special
allocations set forth in Section 6.2 below, Net Income shall
be allocated as follows (and for this purpose, the holders of
Class A Units shall be treated as if they were Original
Limited Partners):
(i) First, one hundred percent (100%) to
the General Partner in an amount equal to the excess,
if any, of (A) the cumulative Net Losses allocated to
the General Partner pursuant to Section 6.1(b)(ix)
and the last sentence of Section 6.1(b) for all prior
fiscal years, over (B) the cumulative Net Income
allocated pursuant to this Section 6.1(a)(i) for all
prior fiscal years;
(ii) Second, one hundred percent (100%) to
the holders of Parity Preferred Units in an amount
equal to the excess, if any, of (A) the cumulative
Net Losses allocated to the holders of Parity
Preferred Units pursuant to Section 6.1(b)(viii) for
all prior fiscal years, over (B) the cumulative Net
Income allocated pursuant to this Section 6.1(a)(ii),
including any amounts allocated pursuant to Section
6.2(g) which were attributable to this Section
6.1(a)(ii), for all prior fiscal years;
(iii) Third, one hundred percent (100%) to
the Original Limited Partners in an amount equal to
the excess, if any, of (A) the cumulative Net Losses
allocated to such Partners pursuant to Section
6.1(b)(iv) for all prior fiscal years, over (B) the
cumulative Net Income allocated pursuant to this
Section 6.1(a)(iii) for all prior fiscal years, which
amount shall be allocated among such Partners in the
same proportions and in the reverse order as the Net
Losses were allocated pursuant to Section 6.1(b)(iv);
(iv) Fourth, one hundred percent (100%) to
the Original Limited Partners in an amount equal to
the excess, if any, of (A) the cumulative Net Losses
allocated to such Partners pursuant to Section
6.1(b)(iii) for all prior fiscal years, over (B) the
cumulative Net Income allocated pursuant to this
Section 6.1(a)(iv) for all prior fiscal years, which
amount shall be allocated among such Partners in the
same proportions and in the reverse order as the Net
Losses were allocated pursuant to Section
6.1(b)(iii);
(v) Fifth, one hundred percent (100%) to
the holders of Parity Preferred Units until the
holders of Parity Preferred Units have been allocated
an amount equal to the excess of their respective
cumulative Priority Returns through the last day of
the current fiscal year (determined without reduction
for distributions made to date in
5
satisfaction thereof) over the cumulative Net Income
allocated to the holders of Parity Preferred Units
pursuant to this Section 6.1(a)(v), including any
amounts allocated pursuant to Section 6.2(g) which
were attributable to this Section 6.1(a)(v), for all
prior periods;
(vi) Sixth, one hundred percent (100%) to
the Original Limited Partners until the cumulative
allocations of Net Income to each Original Limited
Partner under this Section 6.1(a)(vi) for the current
and all prior fiscal years equal the cumulative
distributions paid to the Original Limited Partner
pursuant to Section 5.1(a)(i) and Section 13.2(a)(iv)
, provided, however, in the case of Original Limited
Partners other than Class Z Branch Partners, no
allocations of Net Income shall be made under this
Section 6.1(a)(vi) to such Limited Partners with
respect to distributions made under Section 5.1(a)(i)
and Section 13.2(a)(iv) after the Third Amendment
Date;.
(vii) Seventh, one hundred percent (100%) to
the Original Limited Partners until the cumulative
allocations of Net Income to each Original Limited
Partner under this Section 6.1(a)(vii) for the
current and all prior fiscal years equal the sum of
the cumulative amounts credited to such Partner's
Cumulative Unpaid Priority Distribution Account and
Cumulative Unpaid Accrued Return Account for the
current and all prior fiscal years, provided,
however, in the case of Original Limited Partners
other than Class Z Branch Partners, no allocations of
Net Income shall be made under this Section
6.1(a)(vii) with respect to amounts credited to such
Partners' Cumulative Unpaid Priority Distribution
Accounts and Cumulative Unpaid Accrued Return
Accounts after the Third Amendment Date;
(viii) Eighth, one hundred percent (100%) to
the Additional Limited Partners in an amount equal to
the excess, if any, of (A) the cumulative Net Losses
allocated to the Additional Limited Partners pursuant
to Section 6.1(b)(vii) for all prior fiscal years,
over (B) the cumulative Net Income allocated pursuant
to this Section 6.1(a)(viii) for all prior fiscal
years, which amount shall be allocated among the
Additional Limited Partners in the same proportions
and in the reverse order as the Net Losses were
allocated pursuant to Section 6.1(b)(vii);
(ix) Ninth, one hundred percent (100%) to
the Additional Limited Partners in an amount equal to
the excess, if any of (A) the cumulative Net Losses
allocated to the Additional Limited Partners pursuant
to Section 6.1(b)(vi) for all prior fiscal years,
over (B) the cumulative Net Income allocated pursuant
to this Section 6.1(a)(ix) for all prior fiscal
years, which amount shall be allocated among such
6
Partners in the same proportions and in the reverse
order as the Net Losses were allocated pursuant to
Section 6.1(b)(vi);
(x) Tenth, one hundred percent (100%) to
the Additional Limited Partners until the cumulative
allocations of Net Income to each Additional Limited
Partner under this Section 6.1(a)(x) for the current
and all prior fiscal years equal the cumulative
distributions paid to the Additional Limited Partners
pursuant to Section 5.1(a)(iv) and Section
13.2(a)(v), provided, however, in the case of
Additional Limited Partners other than Class Z
Midland Partners, no allocations of Net Income shall
be made under this Section 6.1(a)(x) to such Limited
Partners with respect to distributions made under
Section 5.1(a)(iv) and Section 13.2(a)(v) after the
Third Amendment Date;
(xi) Eleventh, one hundred percent (100%)
to the Additional Limited Partners until the
cumulative allocations of Net Income to each
Additional Limited Partner under this Section
6.1(a)(xi) for the current and all prior fiscal years
equal the sum of (A) the cumulative amounts credited
to such Partner's Cumulative Unpaid Priority
Distribution Account and Cumulative Unpaid Accrued
Return Account for the current and all prior fiscal
years and (B) the cumulative Net Losses allocated to
the Additional Limited Partner pursuant to Section
6.1(b)(v) for all prior fiscal years, provided,
however, in the case of Additional Limited Partners
other than Class Z Midland Partners, no allocation of
Net Income shall be made under this Section
6.1(a)(xi) with respect to amounts credited to such
Partners' Cumulative Unpaid Priority Distribution
Accounts and Cumulative Unpaid Accrued Return
Accounts after the Third Amendment Date; and
(xii) Thereafter, to the Original and
Additional Limited Partners other than Class Z Branch
Partners or Class Z Midland Partners, to the General
Partner and to any other holders of Class B Units,
pro rata in accordance with the relative amounts of
Available Cash and Capital Transaction Proceeds
distributed to each of them during the taxable year.
(b) Net Losses. After giving effect to the special
allocations set forth in Section 6.2 below, Net Losses shall
be allocated as follows:
(i) First, one hundred percent (100%) to the
Original and Additional Limited Partners other than
Class Z Branch Partners or Class Z Midland Partners,
to the General Partner and the Class B Unit holders
in an amount equal to the excess, if any, of (A) the
cumulative Net Income allocated pursuant to Section
6.1(a)(xii) hereof for all prior fiscal years in
excess of distributions of Available Cash to such
Partners for
7
which no corresponding allocation of Net Income had been
made (or is required to be made) under Sections
6.1(a)(i)-(xi) hereof, over (B) the cumulative Net
Losses allocated pursuant to this Section 6.1(b)(i) for
all prior fiscal years;
(ii) Second, to the Original Limited
Partners until the cumulative allocations of Net
Losses under this Section 6.1(b)(ii) equal the
excess, if any, of the cumulative allocations of Net
Income under Section 6.1(a)(vii) to such Partners for
all prior fiscal years over the cumulative
distributions to such Partners under Section
5.1(a)(ii) and (iii) and Section 5.1(b)(i) and (ii)
for the current and all prior fiscal years (such
allocation being made in proportion to such Partners'
respective excess amounts);
(iii) Third, to the Original Limited
Partners with positive Adjusted Capital Account
balances (determined, solely for purposes of this
Section 6.1(b)(iii), without regard to any obligation
of a Partner to restore a negative Capital Account
under Section 13.4), in proportion to such balances,
until such balances are reduced to zero;
(iv) Fourth, to the Original Limited
Partners in proportion to their relative Percentage
Interests; provided, however, that to the extent that
an allocation under this Section 6.1(b)(iv) would
cause or increase an Adjusted Capital Account Deficit
for such Partner, such Net Loss shall be allocated to
those Original Limited Partners (in proportion to
their relative Percentage Interests) for whom such
allocation would not cause or increase an Adjusted
Capital Account Deficit;
(v) Fifth, to the Additional Limited
Partners until the cumulative allocations of Net
Losses under this Section 6.1(b)(v) equal the excess,
if any, of the cumulative allocations of Net Income
under Section 6.1(a)(xi) to such Partners for all
prior fiscal years over the cumulative distributions
to such Partners under Section 5.1(a)(v) and (vi) and
Section 5.1(b)(iii) and (iv) for the current and all
prior fiscal years (such allocation being made in
proportion to such Partners' respective excess
amounts);
(vi) Sixth, to the Additional Limited
Partners with positive Adjusted Capital Accounts
balances (determined, solely for purposes of this
Section 6.1(b)(vi), without regard to any obligation
of a Partner to restore a negative Capital Account
under Section 13.4), in proportion to such balances,
until such balances are reduced to zero;
(vii) Seventh, to the Additional Limited
Partners in proportion to their relative Percentage
Interests; provided, however, that to the extent that
an allocation under this Section 6.1(b)(vii) would
cause or
8
increase an Adjusted Capital Account Deficit for such
Partner, such Net Loss shall be allocated to those
Additional Limited Partners (in proportion to their
relative Percentage Interests) for whom such allocation
would not cause or increase an Adjusted Capital Account
Deficit;
(viii) Eighth, to the holders of Parity
Preferred Units until their respective Adjusted
Capital Account Balance (determined, solely for
purposes of this Section 6.1(b)(viii), without regard
to any obligation of a Partner to restore a negative
Capital Account under Section 13.4), has been reduced
to zero; and
(ix) Any remaining Net Loss shall be
allocated to the General Partner and any other
holders of Class B Units.
Notwithstanding the foregoing, Net Losses shall not be allocated to any
Limited Partner pursuant to this Section 6.1(b)(ix) to the extent that
such allocation would cause such Limited Partner to have an Adjusted
Capital Account Deficit at the end of such taxable year (or increase
any existing Adjusted Capital Account Deficit). All Net Losses in
excess of the limitations set forth in the preceding sentence of this
Section 6.1(b) shall be allocated to the General Partner.
(b) Section 6.2(g) of the Agreement is hereby deleted and
the following inserted as new Section 6.2(g) in lieu thereof (new language is
underscored):
(g) Capital Account Adjustments. Notwithstanding
anything herein to the contrary other than the last sentence
of Section 14.1(g), any gain or loss arising from an
adjustment to the Gross Asset Value of any Partnership asset
pursuant to clause (b) or (c) of the definition thereof shall
be allocated (i) first, to the holders of the Parity Preferred
Units, but only to the extent that they would have been
allocated such gain pursuant to Section 6.1(a)(ii) or Section
6.1(a)(v) of this Agreement or such loss pursuant to Section
6.1(b)(viii) of this Agreement, as applicable, if such gain or
loss had been actually realized; and (ii) second, and subject
to Section 6.2(h) hereof, one hundred percent (100%) of the
remainder of such gain or loss to the General Partner and the
Additional Limited Partners (other than holders of Parity
Preferred Units) pro rata in accordance with the relative
number of Units held by each; provided, however, that for this
purpose, the General Partner shall be treated as owning all of
the outstanding Class A Units and all of the outstanding
Original Limited Partnership Units in addition to the actual
number of Units which the General Partner holds. An Additional
Limited Partner (except for holders of Parity Preferred
Units), at the time of admission to the Partnership, may elect
with the consent of the General Partner to not receive special
allocations of any gain or loss resulting from such
adjustments.
9
Section 6. Liquidation Preference.
(a) Payment of Liquidating Distributions. Subject to the
rights of holders of Parity Preferred Units with respect to rights upon any
voluntary or involuntary liquidation, dissolution or winding-up of the
Partnership and subject to Partnership Interests ranking senior to the Series E
Preferred Units with respect to rights upon any voluntary or involuntary
liquidation, dissolution or winding up of the Partnership, the holders of Series
E Preferred Units shall be entitled to receive out of the assets of the
Partnership legally available for distribution or the proceeds thereof, after
payment or provision for debts and other liabilities of the Partnership, but
before any payment or distributions of the assets shall be made to holders of
any class or series of Partnership Interest that ranks junior to the Series E
Preferred Units as to rights upon liquidation, dissolution or winding-up of the
Partnership, an amount equal to a liquidation preference equal to their positive
Capital Account balances, determined after taking into account all Capital
Account adjustments for the Partnership taxable year during which the
liquidation occurs, including the allocation of Net Income or Net Loss (and any
specially allocated items) computed after adjusting the Gross Asset Values of
the Partnership's assets immediately prior to any such liquidation if failure to
make such adjustment to the Gross Asset Values would have an adverse economic
impact the Series E Preferred Units (other than those made as a result of the
liquidating distribution set forth in this Section 6(a)). In the event that,
upon such voluntary or involuntary liquidation, dissolution or winding-up, there
are insufficient assets to permit full payment of liquidating distributions to
the holders of Series E Preferred Units and any Parity Preferred Units as to
rights upon liquidation, dissolution or winding-up of the Partnership, all
payments of liquidating distributions on the Series E Preferred Units and such
Parity Preferred Units shall in all cases bear to each other the same ratio that
the respective rights of the Series E Preferred Unit and such other Parity
Preferred Units (which shall not include any accumulation in respect of unpaid
distributions for prior distribution periods if such Parity Preferred Units do
not have cumulative distribution rights) upon liquidation, dissolution or
winding-up of the Partnership bear to each other.
(b) Notice. Written notice of any such voluntary or
involuntary liquidation, dissolution or winding-up of the Partnership, stating
the payment date or dates when, and the place or places where, the amounts
distributable in such circumstances shall be payable, shall be given by (i) fax
and (ii) by first class mail, postage pre-paid, not less than 30 and not more
than 60 days prior to the payment date stated therein, to each record holder of
the Series E Preferred Units at the respective addresses of such holders as the
same shall appear on the transfer records of the Partnership.
(c) No Further Rights. After payment of the full amount of
the liquidating distributions to which they are entitled, the holders of Series
E Preferred Units will have no right or claim to any of the remaining assets of
the Partnership.
(d) Consolidation, Merger or Certain Other Transactions. The
voluntary sale, conveyance, lease, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all of the
property or assets of the General Partner to, or the consolidation or merger or
other business combination of the Partnership with or into, any
10
corporation, trust or other entity (or of any corporation, trust or other entity
with or into the Partnership) shall not be deemed to constitute a liquidation,
dissolution or winding-up of the Partnership.
Section 7. Optional Redemption.
(a) Right of Optional Redemption. The Series E Preferred
Units may not be redeemed prior to the fifth anniversary of the issuance date.
On or after such date, the Partnership shall have the right to redeem the Series
E Preferred Units, in whole or in part, at any time or from time to time, upon
not less than 30 nor more than 60 days' written notice, at a redemption price,
payable in cash, equal to the Capital Account balance of the holder of Series E
Preferred Units (the "Redemption Price"); provided, however, that no redemption
pursuant to this Section 7 will be permitted if such Redemption Price does not
equal or exceed the original Capital Contribution of such holder plus the
cumulative Series E Priority Return, whether or not declared, to the redemption
date to the extent not previously distributed or distributed on the redemption
date pursuant to Section 4(a). If fewer than all of the outstanding Series E
Preferred Units are to be redeemed, the Series E Preferred Units to be redeemed
shall be selected pro rata (as nearly as practicable without creating fractional
units).
(b) Limitation on Redemption.
(i) The Redemption Price of the Series E Preferred
Units (other than the portion thereof consisting of accumulated but unpaid
distributions) will be payable solely out of the sale proceeds of capital stock
of the General Partner, which will be contributed by the General Partner to the
Partnership as an additional capital contribution, or out of the sale of limited
partner interests in the Partnership and from no other source. For purposes of
the preceding sentence, "capital stock" means any equity securities (including
Common Stock and Preferred Stock (as such terms are defined in the Charter)),
shares, participation or other ownership interests (however designated) and any
rights (other than debt securities convertible into or exchangeable for equity
securities) or options to purchase any of the foregoing.
(ii) The Partnership may not redeem fewer than all of
the outstanding Series E Preferred Units unless all accumulated and unpaid
distributions have been paid on all Series E Preferred Units for all quarterly
distribution periods terminating on or prior to the date of redemption.
(c) Procedures for Redemption.
(i) Notice of redemption will be (i) faxed, and (ii)
mailed by the Partnership, by certified mail, postage prepaid, not less than 30
nor more than 60 days prior to the redemption date, addressed to the respective
holders of record of the Series E Preferred Units at their respective addresses
as they appear on the records of the Partnership. No failure to give or defect
in such notice shall affect the validity of the proceedings for the redemption
of any Series E Preferred Units except as to the holder to whom such notice was
defective or not given. In addition to any information required by law, each
such notice shall state: (i) the redemption date, (ii) the Redemption Price,
(iii) the aggregate number of Series E Preferred
11
Units to be redeemed and if fewer than all of the outstanding Series E Preferred
Units are to be redeemed, the number of Series E Preferred Units to be redeemed
held by such holder, which number shall equal such holder's pro rata share
(based on the percentage of the aggregate number of outstanding Series E
Preferred Units the total number of Series E Preferred Units held by such holder
represents) of the aggregate number of Series E Preferred Units to be redeemed,
(iv) the place or places where such Series E Preferred Units are to be
surrendered for payment of the Redemption Price, (v) that distributions on the
Series E Preferred Units to be redeemed will cease to accumulate on such
redemption date and (vi) that payment of the Redemption Price will be made upon
presentation and surrender of such Series E Preferred Units.
(ii) If the Partnership gives a notice of redemption
in respect of Series E Preferred Units (which notice will be irrevocable) then,
by 12:00 noon, New York City time, on the redemption date, the Partnership will
deposit irrevocably in trust for the benefit of the Series E Preferred Units
being redeemed funds sufficient to pay the applicable Redemption Price and will
give irrevocable instructions and authority to pay such Redemption Price to the
holders of the Series E Preferred Units upon surrender of the Series E Preferred
Units by such holders at the place designated in the notice of redemption. If
the Series E Preferred Units are evidenced by a certificate and if fewer than
all Series E Preferred Units evidenced by any certificate are being redeemed, a
new certificate shall be issued upon surrender of the certificate evidencing all
Series E Preferred Units, evidencing the unredeemed Series E Preferred Units
without cost to the holder thereof. On and after the date of redemption,
distributions will cease to accumulate on the Series E Preferred Units or
portions thereof called for redemption, unless the Partnership defaults in the
payment thereof. If any date fixed for redemption of Series E Preferred Units is
not a Business Day, then payment of the Redemption Price payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date fixed for redemption. If payment of the Redemption Price
is improperly withheld or refused and not paid by the Partnership, distributions
on such Series E Preferred Units will continue to accumulate from the original
redemption date to the date of payment, in which case the actual payment date
will be considered the date fixed for redemption for purposes of calculating the
applicable Redemption Price.
Section 8. Voting Rights.
(a) General. Holders of the Series E Preferred Units will
not have any voting rights or right to consent to any matter requiring the
consent or approval of the Limited Partners, except as otherwise expressly set
forth in the Partnership Agreement and except as set forth below.
(b) Certain Voting Rights. So long as any Series E Preferred
Units remain outstanding, the Partnership shall not, without the affirmative
vote of the holders of at least two-thirds of the Series E Preferred Units
outstanding at the time (i) authorize or create, or
12
increase the authorized or issued amount of, any class or series of Partnership
Interests ranking prior to the Series E Preferred Units with respect to payment
of distributions or rights upon liquidation, dissolution or winding-up or
reclassify any Partnership Interests of the Partnership into such Partnership
Interest, or create, authorize or issue any obligations or security convertible
into or evidencing the right to purchase any such Partnership Interest, (ii)
authorize or create, or increase the authorized or issued amount of any Parity
Preferred Units or reclassify any Partnership Interest of the Partnership into
any such Partnership Interest or create, authorize or issue any obligations or
security convertible into or evidencing the right to purchase any such
Partnership Interests but only to the extent such Parity Preferred Units are
issued to an affiliate of the Partnership, other than (A) Security Capital U.S.
Realty, Security Capital Holdings, S.A. or their affiliates or (B) the General
Partner to the extent the issuance of such interests was to allow the General
Partner to issue corresponding preferred stock to persons who are not affiliates
of the Partnership or (iii) either (A) consolidate, merge into or with, or
convey, transfer or lease its assets substantially as an entirety to, any
corporation or other entity or (B) amend, alter or repeal the provisions of the
Partnership Agreement (including without limitation this Amendment No. 4 to
Third Amended and Restated Agreement of Limited Partnership), whether by merger,
consolidation or otherwise, in each case in a manner that would materially and
adversely affect the powers, special rights, preferences, privileges or voting
power of the Series E Preferred Units or the holders thereof; provided, however,
that with respect to the occurrence of a merger consolidation or a sale or lease
of all of the Partnership's assets as an entirety, so long as (a) the
Partnership is the surviving entity and the Series E Preferred Units remain
outstanding with the terms thereof unchanged, or (b) the resulting, surviving or
transferee entity is a partnership, limited liability company or other
pass-through entity organized under the laws of any state and substitutes the
Series E Preferred Units for other interests in such entity having substantially
the same terms and rights as the Series E Preferred Units, including with
respect to distributions, redemptions, transfers, voting rights and rights upon
liquidation, dissolution or winding-up, then the occurrence of any such event
shall not be deemed to materially and adversely affect such rights, privileges
or voting powers of the holders of the Series E Preferred Units and no vote of
the Series E Preferred Units shall be required in such case; and provided
further than any increase in the amount of Partnership Interests or the creation
or issuance of any other class or series of Partnership Interests, in each case
ranking (a) junior to the Series E Preferred Units with respect to payment of
distributions and the distribution of assets upon liquidation, dissolution or
winding-up, or (b) on a parity to the Series E Preferred Units with respect to
payment of distributions and the distribution of assets upon liquidation,
dissolution or winding-up to the extent such Partnership Interests are not
issued to an affiliate of the Partnership, other than (A) Security Capital U.S.
Realty, Security Capital Holdings, S.A. or their affiliates or (B) the General
Partner to the extent the issuance of such interests was to allow the General
Partner to issue corresponding preferred stock to persons who are not affiliates
of the Partnership, shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers and no vote of the Series E
Preferred Units shall be required in such case.
13
Section 9. Transfer Restrictions.
(a) The Series E Preferred Units shall be subject to the
provisions of Article 11 of the Partnership Agreement.
(b) No transfer of the Series E Preferred Units may be made
without the consent of the General Partner, which consent may be given or
withheld in its sole and absolute discretion, if such transfer would result in
more than four partners holding all outstanding Series E Preferred Units within
the meaning of Treasury Regulation Section 1.7704-1(h)(1)(ii) (without regard to
Treasury Regulation Section 1.7704-1(h)(3)(ii)); provided, however, that the
General Partner's consent may not be unreasonably withheld if (a) such transfer
would not result in more than four (4) partners holding all outstanding Series E
Preferred Units within the meaning of such Treasury Regulation Sections or (b)
the General Partner is relying on a provision other than Treasury Regulation
Section 1.7704-1(h) to avoid classification of Operating Partnership as a PTP.
In addition, no transfer may be made to any person if such transfer would cause
the exchange of the Series E Preferred Units for Series E Preferred Shares, as
provided herein, to be required to be registered under the Securities Act, or
any state securities laws.
Section 10. Exchange Rights.
(a) Right to Exchange.
(i) Series E Preferred Units will be exchangeable in
whole or in part at anytime on or after the tenth anniversary of the date of
issuance, at the option of the holders thereof, for authorized but previously
unissued shares of 8.75% Series E Cumulative Redeemable Preferred Stock of the
General Partner (the "Series E Preferred Stock") at an exchange rate of one
share of Series E Preferred Stock for one Series E Preferred Unit, subject to
adjustment as described below (the "Exchange Price"), provided that the Series E
Preferred Units will become exchangeable at any time, in whole or in part, at
the option of the holders of Series E Preferred Units for Series E Preferred
Stock if (y) at any time full distributions shall not have been timely made on
any Series E Preferred Unit with respect to six (6) prior quarterly distribution
periods, whether or not consecutive, provided, however, that a distribution in
respect of Series E Preferred Units shall be considered timely made if made
within two (2) Business Days after the applicable Preferred Unit Distribution
Payment Date if at the time of such late payment there shall not be any prior
quarterly distribution periods in respect of which full distributions were not
timely made or (z) upon receipt by a holder or holders of Series E Preferred
Units of (A) notice from the General Partner that the General Partner or a
subsidiary of the General Partner has become aware of facts that will or likely
will cause the Partnership to become a PTP upon the occurrence of a defined
event in the immediate future and (B) an opinion rendered by an outside
nationally recognized independent counsel familiar with such matters addressed
to a holder or holders of Series E Preferred Units, that the Partnership is or
likely is, or upon the occurrence of a defined event in the immediate future
will be or likely will be, a PTP. In addition, the Series E Preferred Units may
be exchanged for Series E Preferred Stock, in whole or in part, at the option of
any holder
14
prior to the tenth anniversary of the issuance date and after the third
anniversary thereof if such holder of a Series E Preferred Units shall deliver
to the General Partner either (i) a private ruling letter addressed to such
holder of Series E Preferred Units or (ii) an opinion of independent counsel
reasonably acceptable to the General Partner based on the enactment of temporary
or final Treasury Regulations or the publication of a Revenue Ruling, in either
case to the effect that an exchange of the Series E Preferred Units at such
earlier time would not cause the Series E Preferred Units to be considered
"stock and securities" within the meaning of Section 351(e) of the Internal
Revenue Code of 1986, as amended (the "Code") for purposes of determining
whether the holder of such Series E Preferred Units is an "investment company"
under Section 721(b) of the Code if an exchange is permitted at such earlier
date. Furthermore, the Series E Preferred Units may be exchanged in whole or in
part for Series E Preferred Shares at any time after the date hereof, if both
(1) the holder thereof concludes based on results or projected results that
there exists (in the reasonable judgment of the holder) an imminent and
substantial risk that the holder's interest in the Partnership does or will
represent more than 19.5% of the total profits or capital interests in the
Partnership (determined in accordance with Treasury Regulations Section
1.731-2(e)(4)) for a taxable year, and (2) the holder delivers to the General
Partner an opinion of nationally recognized independent counsel to the effect
that there is an imminent and substantial risk that the holder's interest in the
Partnership does or will represent more than 19.5% of the total profits or
capital interests in the Partnership (determined in accordance with Treasury
Regulations Section 1.731(e)(4)) for a taxable year. In addition, Series E
Preferred Units, if the holder thereof so determines, may be exchanged in whole
or in part for Series E Preferred Stock at any time after the date hereof, if
(1) the holder concludes (in the reasonable judgment of the holder) that it is
imminent that less than 90% of the gross income of the Partnership for any
taxable year will or likely will constitute "qualifying income" within the
meaning of Section 7704(d) of the Code and (2) the holder delivers to the
General Partner an opinion of nationally recognized independent counsel to the
effect that it is imminent that less than 90% of the gross income of the
Partnership for a taxable year will or likely will constitute "qualifying
income" within the meaning of Section 7704(d) of the Code.
(ii) Notwithstanding anything to the contrary set
forth in Section 10(a)(i), if an Exchange Notice (as defined herein) has been
delivered to the General Partner, then the General Partner may, at its option,
elect to redeem or cause the Partnership to redeem all or a portion of the
outstanding Series E Preferred Units for cash in an amount equal to the holder's
positive Capital Account balance as apportioned with respect to such redeemed
Units, determined after adjusting the holder's Capital Account for its allocable
share of the Partnership's Net Income or Net Loss (and specially allocated
items) up to the redemption date computed after adjusting the Gross Asset Values
of the Partnership's assets immediately prior to such redemption if failure to
make such adjustment to Gross Asset Values would have an adverse economic impact
the Series E Preferred Units. The General Partner may exercise its option to
redeem the Series E Preferred Units for cash pursuant to this Section 10(a)(ii)
by giving each holder of record of Series E Preferred Units notice of its
election to redeem for cash, within five (5) Business Days after receipt of the
Exchange Notice, by (i) fax, and (ii) registered mail, postage paid, at the
address of each holder as it may appear on the records of the Partnership
stating (i) the redemption date, which shall be no later than sixty (60) days
15
following the receipt of the Exchange Notice, (ii) the redemption price, (iii)
the place or places where the Series E Preferred Units are to be surrendered for
payment of the redemption price, (iv) that distribution on the Series E
Preferred Units will cease to accrue on such redemption date; (v) that payment
of the redemption price will be made upon presentation and surrender of the
Series E Preferred Units and (vi) the aggregate number of Series E Preferred
Units to be redeemed, and if fewer than all of the outstanding Series E
Preferred Units are to be redeemed, the number of Series E Preferred Units to be
redeemed held by such holder, which number shall equal such holder's pro-rata
share (based on the percentage of the aggregate number of outstanding Series E
Preferred Units the total number of Series E Preferred Units held by such holder
represents) of the aggregate number of Series E Preferred Units being redeemed.
(iii) Upon the occurrence of an event giving rise to
exchange rights pursuant to Section 10(a)(i), in the event an exchange of all or
a portion of Series E Preferred Units pursuant to Section 10(a)(i) would violate
the ownership limitation provisions of the General Partner set forth in Article
5 of the Charter, the General Partner shall give written notice thereof to each
holder of record of Series E Preferred Units, within five (5) Business Days
following receipt of the Exchange Notice, by (i) fax, and (ii) registered mail,
postage prepaid, at the address of each such holder set forth in the records of
the Partnership. In such event, each holder of Series E Preferred Units shall be
entitled to exchange, pursuant to the provisions of Section 10(b) a number of
Series E Preferred Units which would comply with the ownership limitation
provisions of the General Partner set forth in such Article 5 of the Charter and
any Series E Preferred Units not so exchanged (the "Excess Units") shall be
redeemed by the Partnership for cash in an amount equal to the original Capital
Contribution per Excess Unit, plus any accrued and unpaid distributions thereon,
whether or not declared, to the date of redemption. The written notice of the
General Partner shall state (i) the number of Excess Units held by such holder,
(ii) the redemption price of the Excess Units, (iii) the date on which such
Excess Units shall be redeemed, which date shall be no later than sixty (60)
days following the receipt of the Exchange Notice, (iv) the place or places
where such Excess Units are to be surrendered for payment of the Redemption
Price, (v) that distributions on the Excess Units will cease to accrue on such
redemption date, and (vi) that payment of the redemption price will be made upon
presentation and surrender of such Excess Units. In the event an exchange would
result in Excess Units, as a condition to such exchange, each holder of such
units agrees to provide representations and covenants reasonably requested by
the General Partner relating to (i) the widely held nature of the interests in
such holder, sufficient to assure the General Partner that the holder's
ownership of stock of the General Partner (without regard to the limits
described above) will not cause any individual to own in excess of 9.8% of the
stock of the General Partner, to the extent such holder can reasonably make such
representation; and (ii) to the extent such holder can so represent and covenant
without obtaining information from its owners, the holder's ownership of tenants
of the Partnership and its affiliates.
Notwithstanding any provision of this Agreement to the contrary, no
Series E Limited Partner shall be entitled to effect an exchange of Series E
Preferred Units for Series E Preferred Stock to the extent that ownership or
right to acquire such shares would cause the Partner or any other Person or, in
the opinion of counsel selected by the General Partner, may
16
cause the Partner or any other Person, to violate the restrictions on ownership
and transfer of Series E Preferred Stock set forth in the Charter. To the extent
any such attempted exchange for Series E Preferred Stock would be in violation
of the previous sentence, it shall be void ab initio and such Series E Limited
Partner shall not acquire any rights or economic interest in the Series E
Preferred Stock otherwise issuable upon such exchange.
(iv) The redemption of Series E Preferred Units
described in Section 10(a)(ii) and (iii) shall be subject to the provisions of
Section 7(b)(i) and Section 7(c)(ii); provided, however, that for purposes
hereof the term "Redemption Price" in Sections 7(b)(i) and 7(c)(ii) shall be
read to mean the original Capital Contribution per Series E Preferred Unit being
redeemed plus all accrued and unpaid distributions to the redemption date.
(b) Procedure for Exchange.
(i) Any exchange shall be exercised pursuant to a
notice of exchange (the "Exchange Notice") delivered to the General Partner by
the holder who is exercising such exchange right, by (i) fax and (ii) by
certified mail postage prepaid. Upon request of the General Partner, such holder
delivering the Exchange Notice shall provide to the General Partner in writing
such information as the General Partner may reasonably request to determine
whether any portion of the exchange by the delivering holder will result in the
violation of the restrictions of Article 5 of the Charter, including the
Ownership Limit and the Related Tenant Limit. The exchange of Series E Preferred
Units, or a specified portion thereof, may be effected after the fifth (5th)
Business Day following receipt by the General Partner of the Exchange Notice and
such requested information by delivering certificates, if any, representing such
Series E Preferred Units to be exchanged together with, if applicable, written
notice of exchange and a proper assignment of such Series E Preferred Units to
the office of the General Partner maintained for such purpose. Currently, such
office is 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxx 00000. Each
exchange will be deemed to have been effected immediately prior to the close of
business on the date on which such Series E Preferred Units to be exchanged
(together with all required documentation) shall have been surrendered and
notice shall have been received by the General Partner as aforesaid and the
Exchange Price shall have been paid. Any Series E Preferred Shares issued
pursuant to this Section 10 shall be delivered as shares which are duly
authorized, validly issued, fully paid and nonassessable, free of pledge, lien,
encumbrance or restriction other than those provided in the Charter, the Bylaws
of the General Partner, the Securities Act and relevant state securities or blue
sky laws.
(ii) In the event of an exchange of Series E
Preferred Units for shares of Series E Preferred Stock, an amount equal to the
accrued and unpaid distributions which are not paid pursuant to Section 4(a)
hereof, whether or not declared, to the date of exchange on any Series E
Preferred Units tendered for exchange shall (i) accrue and be payable by the
General Partner from and after the date of exchange on the shares of the Series
E Preferred Stock into which such Series E Preferred Units are exchanged, and
(ii) continue to accrue on such Series E Preferred Units, which shall remain
outstanding following such exchange, with
17
the General Partner as the holder of such Series E Preferred Units.
Notwithstanding anything to the contrary set forth herein, in no event shall a
holder of a Series E Preferred Unit that was validly exchanged into Series E
Preferred Stock pursuant to this section (other than the General Partner now
holding such Series E Preferred Unit), receive a distribution out of Available
Cash or Capital Transaction Proceeds of the Partnership with respect to any
Series E Preferred Units so exchanged.
(iii) Fractional shares of Series E Preferred Stock
are not to be issued upon exchange but, in lieu thereof, the General Partner
will pay a cash adjustment based upon the fair market value of the Series E
Preferred Stock on the day prior to the exchange date as determined in good
faith by the Board of Directors of the General Partner.
(c) Adjustment of Series E Exchange Price. In case the
General Partner shall be a party to any transaction (including, without
limitation, a merger, consolidation, statutory share exchange, tender offer for
all or substantially all of the General Partner's capital stock or sale of all
or substantially all of the General Partner's assets), in each case as a result
of which the Series E Preferred Stock will be converted into the right to
receive shares of capital stock, other securities or other property (including
cash or any combination thereof), each Series E Preferred Unit will thereafter
be exchangeable into the kind and amount of shares of capital stock and other
securities and property receivable (including cash or any combination thereof)
upon the consummation of such transaction by a holder of that number of Series E
Preferred Stock or fraction thereof into which one Series E Preferred Unit was
exchangeable immediately prior to such transaction. The General Partner may not
become a party to any such transaction unless the terms thereof are consistent
with the foregoing.
Section 11. No Conversion Rights. The holders of the Series E
Preferred Units shall not have any rights to convert such Partnership Units into
any other class of Partnership Interests or any other interest in the
Partnership.
Section 12. No Sinking Fund. No sinking fund shall be established
for the retirement or redemption of the Series E Preferred Units.
Section 13. Miscellaneous.
(a) The terms "Original Limited Partnership Units," "Class B
Units," "Class 2 Units," "Class Z Branch Partners," "Class Z Midland Partners,"
"Additional Limited Partners," "Common Units," "General Partner Units" and
"Percentage Interest" in the Partnership Agreement shall not be deemed to
include the Series E Preferred Units. The terms "Limited Partnership Interest"
and "Partnership Interest" shall be deemed to include the Series E Preferred
Units.
(b) Exhibit A to the Partnership Agreement is hereby amended
to include the Series E Preferred Units as Limited Partnership Interests.
(c) Section 7.1(h) of the Partnership Agreement is hereby
amended to include the Series E Priority Return Amount.
18
(d) Nothing contained in Section 8.4 or the last sentence of
Section 13.6 of the Partnership Agreement shall be deemed to limit the issuance
of, and provisions applicable to, the Series E Preferred Units.
(e) Notwithstanding anything to the contrary contained in
Section 8.6 of the Partnership Agreement, in no event shall the rights of the
holders of the Series E Preferred Units set forth in Section 10 of this
Agreement be subordinate to the Redemption Rights set forth in Section 8.6 of
the Partnership Agreement.
(f) All references to Section 4.5(f) and Section 4.5(f)(ii)
shall be deemed to include a reference to Section 8 and Section 8(b) hereof,
respectively.
(g) Simultaneously with the effectiveness of the Fourth
Amended Agreement, this Amendment No. 4 to the Partnership Agreement shall be
deemed Amendment No. 4 to the Fourth Amended Agreement, mutatis mutandis, and
the Series E Preferred Units shall continue to be outstanding upon the terms and
conditions set forth herein.
(h) This Amendment may be executed in one or more
counterparts, all of which shall constitute one and the same agreement.
19
GENERAL PARTNER
Regency Realty Corporation
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxx
Its Managing Director and Executive
Vice President
CONTRIBUTOR
XXXXXXX XXXXX 0000 XXXXXXXX XXXXX FUND,
L.P.
By: Xxxxxxx Sachs Management Partners,
L.P., as its general partner
By: Xxxxxxx Xxxxx Management, Inc., as
its general partner
By: /s/ Xxxxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxxxx X. Xxxxxx
Title: Vice President
SECURITY CAPITAL U.S. REALTY
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
SECURITY CAPITAL HOLDINGS S.A.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
ARDEN SQUARE HOLDINGS SARL
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
BLOSSOM VALLEY HOLDINGS SARL
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
XXXXXX STREET PLAZA HOLDINGS SARL
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
DALLAS HOLDINGS SARL
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
EL CAMINO HOLDINGS SARL
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
FRIARS MISSION HOLDINGS SARL
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
Regency Centers, L.P.
Amendment No. 3 to Third Amended and Restated Agreement of
Limited Partnership
Relating to 9.125% Series D Cumulative Redeemable Preferred Units
This Amendment No. 3 (this "Amendment") to the Third Amended
and Restated Agreement of Limited Partnership, dated as of September 1, 1999 (as
amended through the date hereof, the "Partnership Agreement"), of Regency
Centers, L.P., a Delaware limited partnership (the "Partnership"), is made as of
the 29th day of September, 1999 by Regency Realty Corporation, Inc., a Florida
corporation, as general partner (the "General Partner"), and the undersigned
Limited Partners that are being admitted to the Partnership on the date hereof.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the General Partner and the Limited Partners desire
to amend the Partnership Agreement to create a class of Preferred Units and to
set forth the rights, powers, duties and preferences of such Preferred Units.
NOW THEREFORE, pursuant to the authority contained in Section
4.2(b) of the Partnership Agreement, the General Partner hereby amends the
Partnership Agreement as follows:
A. Defined Terms. Capitalized terms used in this Amendment and not
otherwise defined herein shall have the meaning assigned thereto in the
Partnership Agreement.
B. Amendments. Effective as of the date hereof, the Partnership
Agreement is hereby amended as follows:
Section 1. Amendments to Article 1 - Defined Terms.
(a) New Definitions
The following terms are hereby added to Article 1 in their
correct alphabetical order"
"Series D Excess Units" has the meaning set forth in Section
4.8(g)(i)(C).
"Series D Exchange Notice" has the meaning set forth in
Section 4.8(g)(ii)(A).
"Series D Exchange Price" has the meaning set forth in Section
4.8(g)(i)(A).
"Series D Preferred Partner" means the Limited Partners who
received Series D Preferred Units and also include any permitted transferee of a
Series D Preferred Partner pursuant to Section 11.3 and the General Partner or
any Affiliate of Regency upon exchange or redemption of the Series D Preferred
Units pursuant to Section 4.8.
"Series D Preferred Stock" has the meaning set forth in
Section 4.8(g)(i)(A).
"Series D Preferred Units" means the Partnership Interest in
the Partnership issued pursuant to Section 4.2 and Section 4.8 hereof
representing 9.125% Series D Cumulative Redeemable Preferred Units. The term
"Series D Preferred Unit" does not include or refer to any Original Limited
Partnership Units, Additional Units or Class B Units.
"Series D Preferred Unit Distribution Payment Date" has the
meaning set forth in Section 4.8(c)(i).
"Series D Preferred Unit Partnership Record Date" has the
meaning set forth in Section 4.8(c)(i).
"Series D Priority Return" means an amount equal to 9.125% per
annum, determined on the basis of a 360 day year of twelve 30 day months (or
actual days for any month which is shorter than a full monthly period),
cumulative to the extent not distributed for any given distribution period, of
the stated value of $100 per Series D Preferred Unit, commencing on the date of
issuance of such Series D Preferred Unit.
"Series D Redemption Price" has the meaning set forth in
Section 4.8(e)(i).
(b) Amendment to Existing Definitions
(i) All references in Article I and elsewhere in the
Partnership Agreement to: "Excess Units", "Exchange Notice", "Exchange Price",
"Preferred Unit Distribution Payment Date", "Preferred Unit Partnership Record
Date" and "Priority Return" shall be deemed references to "Series A Excess
Units", "Series A Exchange Notice", "Series A Exchange Price", "Series A
Preferred Unit Distribution Payment Date", "Series A Preferred Unit Partnership
Record Date" and "Series A Priority Return" respectively.
(ii) The definition of "Percentage Interest" is hereby
amended by deleting the words "Adjusted Series A Preferred Units" each time such
words appear in said definition.
(iii) The definition of "Adjusted Series A Preferred Units" is
hereby deleted.
Section 2. Section 4.1 - Capital Contributions of Series A
Preferred Partners and Series D Preferred Partners.
Section 4.1(d) of the Partnership Agreement is hereby deleted
and the following inserted in lieu thereof:
"(d) (i) The Series A Preferred Partners have contributed
cash to the Partnership in the amount of $50 per Series A Preferred Unit. The
distribution rights for the Series A Preferred Units shall be senior to the
distribution rights of the Original Limited Partnership Units, the Additional
Xxxxx,
0
the Common Units, the Class 2 Units and the Class B Units. The number of
Series A Preferred Units issued to the Series A Preferred Partners is set forth
on Exhibit A. (ii) The Series D Preferred Partners have contributed cash to the
Partnership in the amount of $100 per Series D Preferred Unit. The distribution
rights for the Series D Preferred Units shall be senior to the distribution
rights of the Original Limited Partnership Units, the Additional Units, Common
Units, the Class 2 Units and the Class B Units . The number of Series D
Preferred Units issued to the Series D Preferred Partners is set forth on
Exhibit A."
Section 3. Section 4.2 - Issuance of Additional Partnership
Interests.
(a) Section 4.2(a) is hereby amended by inserting the words
"and Section 4.8(f)(ii)" after the reference to "Section 4.5 (f)(ii)" in the
third sentence thereof.
(b) Section 4.2(b)(i) is hereby amended by inserting the
words "and Section 4.8(f)(ii)" after the reference to "Section 4.5 (f)(ii)" in
the first line thereof.
Section 4. Section 4.5
(a) Section 4.5(c)(i) is hereby amended by (i) inserting the
parenthetical "(such quarterly periods to be the quarterly periods ending on the
dates specified in this sentence)" after the first reference to "quarterly" in
clause (A) in the second sentence thereof; and (ii) deleting the words "computed
on the basis of the actual number of days elapsed in such a 30-day month" in the
third sentence thereof and inserting "computed on the basis of the ratio of the
actual number of days elapsed in such quarterly period to ninety (90) days"
therefor.
(b) Section 4.5(c)(iv)(A) is hereby amended by deleting it
in its entirety and inserting the following in lieu thereof:
"(A) So long as any Series A Preferred Units are
outstanding, no distribution of cash or other property shall
be authorized, declared, paid or set apart for payment on or
with respect to any class or series of Junior Units as to
distributions, nor shall any cash or other property be set
aside for or applied to the purchase, redemption or other
acquisition for consideration of any Series A Preferred Units,
any Parity Preferred Units as to distributions or any Junior
Units, unless, in each case, all distributions accumulated on
all Series A Preferred Units and all classes and series of
outstanding Parity Preferred Units as to distributions have
been paid in full. The foregoing sentence will not prohibit
(a) distributions payable solely in Junior Units, (b) the
conversion of Junior Units or Parity Preferred Units into
Junior Units, or (c) the redemption of Partnership Interests
corresponding to any Series A Preferred Stock, Parity
Preferred Stock or Junior Stock to be purchased by the General
Partner pursuant to Article 5 of the Articles of Incorporation
to preserve the General Partner's status as a real estate
investment trust, provided that such redemption shall be upon
the same
3
terms as the corresponding purchase pursuant to Article 5 of
the Articles of Incorporation."
(c) Section 4.5(d)(i) is hereby amended by (A) deleting the
words "and (ii) an amount equal to any accumulated and unpaid distributions
thereon, whether or not declared, to the date of payment" from the end of the
first sentence and deleting the reference to "(i)" after the words "an amount
equal to the sum of" in that sentence and (B) inserting the words "(including
all accumulated and unpaid distributions, whether or not declared, to the date
of payment to the extent not previously credited to such Capital Account
balances)" after the words "Capital Account balances" in the former clause (i)
thereof.
(d) Section 4.5(f)(ii) is hereby amended by inserting the
words "if issued upon arm's length terms in the good faith determination of the
board of directors of the General Partner" after the words "Security Capital" in
clause (B)(I) thereof.
(e) The last sentence of Section 4.5(g)(i)(A) is hereby
deleted and the following inserted in lieu thereof:
"Furthermore, the Series A Preferred Units may be exchanged in whole
but not in part by any holder thereof which is a real estate investment
trust within the meaning of Sections 856 through 859 of the Code for
Series A Preferred Stock (but only if the exchange in whole may be
accomplished consistently with the ownership limitations set forth
under Article 5 of the Articles of Incorporation (taking into account
exceptions thereto)) if at any time (i) the Partnership reasonably
determines that the assets and income of the Partnership for a taxable
year after 1999 would not satisfy the income and assets tests of
Section 856 of the Code for such taxable year if the Partnership were a
real estate investment trust within the meaning of the Code or (ii) any
such holder of Series A Preferred Units shall deliver to the
Partnership and the General Partner an opinion of independent counsel
reasonably acceptable to the General Partner to the effect that, based
on the assets and income of the Partnership for a taxable year after
1999, the Partnership would not satisfy the income and assets tests of
Section 856 of the Code for such taxable year if the Partnership were a
real estate investment trust within the meaning of the Code and that
such failure would create a meaningful risk that a holder of the Series
A Preferred Units would fail to maintain qualification as a real estate
investment trust.
(f) The following Section 4.5(g)(iii)(C) is hereby added to
the Partnership Agreement:
(C) So long as a Preferred Partner or any of its permitted successors
or assigns holds any Series A Preferred Units as the case may be, the
General Partner shall not, without the affirmative vote of the holders
of at least two-thirds of the Series A Preferred Units (excluding any
Series A Preferred Units surrendered to the General Partner in exchange
for Series A Preferred Stock) and Series A Preferred Stock (voting
together as a class based on the number of shares into which such
Series A Preferred Units are then convertible) outstanding at the
4
time: (a) designate or create, or increase the authorized or issued
amount of, any class or series of shares ranking senior to the Series A
Preferred Stock with respect to the payment of distributions or rights
upon liquidation, dissolution or winding-up or reclassify any
authorized shares of the General Partner into any such shares, or
create, authorize or issue any obligations or securities convertible
into or evidencing the right to purchase any such shares; (b) designate
or create, or increase the authorized or issued amount of, any Parity
Preferred Stock or reclassify any authorized shares of the General
Partner into any such shares, or create, authorize or issue any
obligations or security convertible into or evidencing the right to
purchase any such shares, but only to the extent that such Parity
Preferred Stock are issued to an Affiliate of the General Partner other
than (A) Security Capital U.S. Realty, Security Capital Holdings, S.A.
or their affiliates (if issued on arm's length terms in the good faith
determination of the board of directors of the General Partner), or (B)
the General Partner to the extent the issuance of such interests was to
allow the General Partner to issue corresponding preferred stock in the
same transaction to persons who are not affiliates of the Partnership;
(c) amend, alter or repeal the provisions of the Charter or bylaws of
the General Partner, whether by merger, consolidation or otherwise,
that would materially and adversely affect the powers, special rights,
preferences, privileges or voting power of the Series A Preferred Stock
or the holders thereof; provided, however, that any increase in the
amount of authorized Preferred Stock or the creation or issuance of any
other series or class of Preferred Stock, or any increase in the amount
of authorized shares of each class or series, in each case ranking
either (1) junior to the Series A Preferred Stock with respect to the
payment of distributions or the distribution of assets upon
liquidation, dissolution or winding-up, or (2) on a parity with the
Series A Preferred Stock with respect to the payment of distributions
or the distribution of assets upon liquidation, dissolution or
winding-up to the extent such Preferred Stock are not issued to an
Affiliate of the General Partner (other than Security Capital U.S.
Realty, Security Capital Holdings, S.A. or their affiliates if issued
on arm's length terms in the good faith determination of the board of
directors of the General Partner), or (B) General Partner to the extent
the issuance of such interests was to allow the General Partner to
issue corresponding preferred stock to persons who are not affiliates
of the Partnership, shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers."
Section 5. Section 4.8 - Series D Preferred Units
The Partnership Agreement is hereby amended by inserting
the following as a new Section 4.8:
"Section 4.8 Issuance of Series D Preferred Units.
(a) Designation and Number. A series of Partnership Units in
the Partnership designated as the "9.125%" Series D Cumulative Redeemable
Preferred Units (the "Series D Preferred Units") is hereby established. The
number of Series D Preferred Units shall be 500,000.
5
(b) Rank.
The Series D Preferred Units will, with respect to
distributions and rights upon voluntary or involuntary liquidation, winding-up
or dissolution of the Partnership, rank senior to all classes or series of
Partnership Interests now or hereafter authorized, issued or outstanding, other
than the Series A Preferred Units, Series B Preferred Units and Series C
Preferred Units and any class or series of equity securities of the Partnership
issued after the issuance of the Series D Preferred Units and expressly
designated in accordance with the Partnership Agreement as ranking on a parity
with or senior to the Series D Preferred Units as to distributions or rights
upon voluntary or involuntary liquidation, winding-up or dissolution of the
Partnership. The Series D Preferred Units are expressly designated as ranking on
a parity with the Series A Preferred Units, the Series B Preferred Units and the
Series C Preferred Units as to both distributions and rights upon voluntary or
involuntary liquidation, winding-up or dissolution of the Partnership.
(c) Distributions.
(i) Payment of Distributions. Subject to the rights of
holders of Parity Preferred Units and any holders of Partnership Interests
issued after the date hereof in accordance herewith ranking senior to the Series
D Preferred Units as to the payment of distributions, holders of Series D
Preferred Units shall be entitled to receive, when, as and if declared by the
Partnership acting through the General Partner, out of Available Cash and
Capital Transaction Proceeds, cumulative preferential cash distributions at the
rate per annum of 9.125% of the original Capital Contribution per Series D
Preferred Unit. Such distributions shall be cumulative, shall accrue from the
original date of issuance and will be payable (A) quarterly (such quarterly
periods to be the quarterly periods ending on the dates set forth in this
sentence) in arrears, on or before March 31, June 30, September 30 and December
31 of each year, commencing on December 31, 1999 (with the first such payment to
include the amount accrued from the period commencing September 29, 1999 and
ending December 31, 1999) and, (B) in the event of (i) an exchange of Series D
Preferred Units into Series D Preferred Stock, or (ii) a redemption of Series D
Preferred Units, on the exchange date or redemption date, as applicable (each a
"Series D Preferred Unit Distribution Payment Date"). The amount of the
distribution payable for any period will be computed on the basis of a 360-day
year of twelve 30-day months and for any period shorter than a full quarterly
period for which distributions are computed, the amount of the distribution
payable will be computed on the basis of the ratio of the actual number of days
elapsed in such period to ninety (90) days. If any date on which distributions
are to be made on the Series D Preferred Units is not a Business Day (as defined
herein), then payment of the distribution to be made on such date will be made
on the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay) except that, if such Business Day is
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date. Distributions on December 31, 1999 and thereafter will
be made to the holders of record of the Series D Preferred Units on the relevant
record dates to be fixed by the Partnership acting through the General Partner,
which record dates shall be not less than ten (10) days and not more than thirty
(30) Business Days prior to the relevant Preferred Unit Distribution Payment
Date (the "Series D Preferred Unit Partnership Record Date").
6
(ii) Limitation on Distributions. No distribution on the
Series D Preferred Units shall be declared or paid or set apart for payment by
the Partnership at such time as the terms and provisions of any agreement of the
Partnership relating to its indebtedness (other than any agreement with the
holder of Partnership Interests or an Affiliate thereof), prohibits such
declaration, payment or setting apart for payment or provide, that such
declaration, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such declaration, payment or setting
apart for payment shall be restricted or prohibited by law. Nothing in this
Section 4(c)(ii) shall be deemed to modify or in any manner limit the provisions
of Sections 4.8(c)(iii) or 4.8(c)(iv).
(iii) Distributions Cumulative. Distributions on the Series D
Preferred Units will accrue whether or not the terms and provisions of any
agreement of the Partnership, including any agreement relating to its
indebtedness, at any time prohibit the current payment of distributions, whether
or not the Partnership has earnings, whether or not there are funds legally
available for the payment of such of such distributions and whether or not such
distributions are authorized. Accrued but unpaid distributions on the Series D
Preferred Units will accumulate as of the Series D Preferred Unit Distribution
Payment Date on which they first become payable. Distributions on account of
arrears for any past distribution periods may be declared and paid at any time,
without reference to a regular Series D Preferred Unit Distribution Payment Date
to holders of record of the Series D Preferred Units on the record date fixed by
the Partnership acting through the General Partner which date shall be not less
than ten (10) days and not more than thirty (30) Business Days prior to the
payment date. Accumulated and unpaid distributions will not bear interest.
(iv) Priority as to Distributions.
(A) So long as any Series D Preferred Units are
outstanding, no distribution of cash or other property shall
be authorized, declared, paid or set apart for payment on or
with respect to any class or series of Junior Units with
respect to distributions, nor shall any cash or other property
be set aside for or applied to the purchase, redemption or
other acquisition for consideration of any Series D Preferred
Units, any Parity Preferred Units with respect to
distributions or any Junior Units, unless, in each case, all
distributions accumulated on all Series D Preferred Units and
all classes and series of outstanding Parity Preferred Units
as to the payment of distributions have been paid in full.
Without limiting Section 4.8(f)(ii), the foregoing sentence
will not prohibit (a) distributions payable solely in Junior
Units, (b) the conversion of Junior Units or Parity Preferred
Units into Junior Units, or (c) the redemption of Partnership
Interests corresponding to any Series D Preferred Stock,
Parity Preferred Stock or Junior Stock to be purchased by the
General Partner pursuant to Article 5 of the Articles of
Incorporation to preserve the General Partner's status as a
real estate investment trust, provided that such redemption
shall be upon the same terms as the corresponding purchase
pursuant to Article 5 of the Articles of Incorporation.
(B) So long as distributions have not been paid in
full (or a sum sufficient for such full payment is not
irrevocably deposited in trust for payment) upon the Series
7
D Preferred Units, all distributions authorized and declared on
the Series D Preferred Units and all classes or series of
outstanding Parity Preferred Units as to distributions shall
be authorized and declared so that the amount of distributions
authorized and declared per Series D Preferred Unit and such
other classes or series of Parity Preferred Units shall in all
cases bear to each other the same ratio that accrued
distributions per Series D Preferred Unit and such other
classes or series of Parity Preferred Units (which shall not
include any accumulation in respect of unpaid distributions
for prior distribution periods if such class or series of
Parity Preferred Units do not have cumulative distribution
rights) bear to each other.
(v) No Further Rights. Holders of Series D Preferred Units
shall not be entitled to any distributions, whether payable in cash, other
property or otherwise, in excess of the full cumulative distributions described
herein.
(d). Liquidation Preference.
(i) Payment of Liquidating Distributions. Subject to the
rights of holders of Parity Preferred Units with respect to rights upon any
voluntary or involuntary liquidation, dissolution or winding-up of the
Partnership and subject to Partnership Interests ranking senior to the Series D
Preferred Units with respect to rights upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership, the holders of Series
D Preferred Units shall be entitled to receive out of the assets of the
Partnership legally available for distribution or the proceeds thereof, after
payment or provision for debts and other liabilities of the Partnership, but
before any payment or distributions of the assets shall be made to holders of
any class or series of Partnership Interest that ranks junior to the Series D
Preferred Units as to rights upon liquidation, dissolution or winding-up of the
Partnership, an amount equal to the sum of a liquidation preference equal to
their positive Capital Account balances (including, without limitation, any
accumulated and unpaid distributions, whether or not declared, to the date of
payment to the extent not previously credited to such Capital Account balances),
determined after taking into account all Capital Account adjustments for the
Partnership taxable year during which the liquidation occurs (other than those
made as a result of the liquidating distribution set forth in this 4.8(d)(i)).
In the event that, upon such voluntary or involuntary liquidation, dissolution
or winding-up, there are insufficient assets to permit full payment of
liquidating distributions to the holders of Series D Preferred Stock and any
Parity Preferred Units as to rights upon liquidation, dissolution or winding-up
of the Partnership, all payments of liquidating distributions on the Series D
Preferred Units and such Parity Preferred Units shall be made so that the
payments on the Series D Preferred Units and such Parity Preferred Units shall
in all cases bear to each other the same ratio that the respective rights of the
Series D Preferred Unit and such other Parity Preferred Units (which shall not
include any accumulation in respect of unpaid distributions for prior
distribution periods if such Parity Preferred Units do not have cumulative
distribution rights) upon liquidation, dissolution or winding-up of the
Partnership bear to each other.
(ii) Notice. Written notice of any such voluntary or
involuntary liquidation, dissolution or winding-up of the Partnership, stating
the payment date or dates when, and the place or places where, the amounts
distributable in such circumstances shall be payable, shall be given by (i)
8
fax and (ii) by first class mail, postage pre-paid, not less than 30 and not
more that 60 days prior to the payment date stated therein, to each record
holder of the Series D Preferred Units at the respective addresses of such
holders as the same shall appear on the transfer records of the Partnership.
(iii) No Further Rights. After payment of the full amount of
the liquidating distributions to which they are entitled, the holders of Series
D Preferred Units will have no right or claim to any of the remaining assets of
the Partnership.
(iv) Consolidation, Merger or Certain Other Transactions. The
voluntary sale, conveyance, lease, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all of the
property or assets of the General Partner to, or the consolidation or merger or
other business combination of the Partnership with or into, any corporation,
trust or other entity (or of any corporation, trust or other entity with or into
the Partnership) shall not be deemed to constitute a liquidation, dissolution or
winding-up of the Partnership.
(e) Optional Redemption.
(i) Right of Optional Redemption. The Series D Preferred
Units may not be redeemed prior to the fifth anniversary of the issuance date.
On or after such date, the Partnership shall have the right to redeem the Series
D Preferred Units, in whole or in part, at any time or from time to time, upon
not less than 30 nor more than 60 days' written notice, at a redemption price,
payable in cash, equal to the Capital Account balance of the holder of Series D
Preferred Units (the "Series D Redemption Price"); provided, however, that no
redemption pursuant to this Section 4.8(e)(i) will be permitted if the Series D
Redemption Price does not equal or exceed the original Capital Contribution of
such holder plus the cumulative Series D Priority Return, whether or not
declared, to the redemption date to the extent not previously distributed or
distributed on the redemption date pursuant to Section 4.8(c)(i). If fewer than
all of the outstanding Series D Preferred Units are to be redeemed, the Series D
Preferred Units to be redeemed shall be selected pro rata (as nearly as
practicable without creating fractional units).
(ii) Limitation on Redemption.
(A) The Series D Redemption Price (other than the
portion thereof consisting of accumulated but unpaid
distributions) will be payable solely out of the sale proceeds
of capital stock of the General Partner, which will be
contributed by the General Partner to the Partnership as
additional capital contribution, or out of the sale of limited
partner interests in the Partnership and from no other source.
For purposes of the preceding sentence, "capital stock" means
any equity securities (including Common Stock and Preferred
Stock (as such terms are defined in the Articles of
Incorporation)), shares, participation or other ownership
interests (however designated) and any rights (other than debt
securities convertible into or exchangeable for equity
securities) or options to purchase any of the foregoing.
9
(B) The Partnership may not redeem fewer than all of
the outstanding Series D Preferred Units unless all accumulated
and unpaid distributions have been paid on all Series D
Preferred Units for all quarterly distribution periods
terminating on or prior to the date of redemption.
(iii) Procedures for Redemption.
(A) Notice of redemption will be (i) faxed, and (ii)
mailed by the Partnership, by certified mail, postage prepaid,
not less than 30 nor more than 60 days prior to the redemption
date, addressed to the respective holders of record of the
Series D Preferred Units at their respective addresses as they
appear on the records of the Partnership. No failure to give
or defect in such notice shall affect the validity of the
proceedings for the redemption of any Series D Preferred Units
except as to the holder to whom such notice was defective or
not given. In addition to any information required by law,
each such notice shall state: (i) the redemption date, (ii)
the Series D Redemption Price, (iii) the aggregate number of
Series D Preferred Units to be redeemed and if fewer than all
of the outstanding Series D Preferred Units are to be
redeemed, the number of Series D Preferred Units to be
redeemed held by such holder, which number shall equal such
holder's pro rata share (based on the percentage of the
aggregate number of outstanding Series D Preferred Units the
total number of Series D Preferred Units held by such holder
represents) of the aggregate number of Series D Preferred
Units to be redeemed, (iv) the place or places where such
Series D Preferred Units are to be surrendered for payment of
the Series D Redemption Price, (v) that distributions on the
Series D Preferred Units to be redeemed will cease to
accumulate on such redemption date and (vi) that payment of
the Series D Redemption Price will be made upon presentation
and surrender of such Series D Preferred Units.
(B) If the Partnership gives a notice of redemption
in respect of Series D Preferred Units (which notice will be
irrevocable) then, by 12:00 noon, New York City time, on the
redemption date, the Partnership will deposit irrevocably in
trust for the benefit of the Series D Preferred Units being
redeemed funds sufficient to pay the applicable Series D
Redemption Price and will give irrevocable instructions and
authority to pay such Series D Redemption Price to the holders
of the Series D Preferred Units upon surrender of the Series D
Preferred Units by such holders at the place designated in the
notice of redemption. If the Series D Preferred Units are
evidenced by a certificate and if fewer than all Series D
Preferred Units evidenced by any certificate are being
redeemed, a new certificate shall be issued upon surrender of
the certificate evidencing all Series D Preferred Units,
evidencing the unredeemed Series D Preferred Units without
cost to the holder thereof. On and after the date of
redemption, distributions will cease to accumulate on the
Series D Preferred Units or portions thereof called for
redemption, unless the Partnership defaults in the payment
thereof. If any date fixed for redemption of Series D
Preferred Units is not a Business Day, then payment of the
Series D Redemption Price payable on such date will be made on
the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay)
except that, if such Business Day falls in
10
the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same
force and effect as if made on such date fixed for redemption.
If payment of the Series D Redemption Price is improperly
withheld or refused and not paid by the Partnership,
distributions on such Series D Preferred Units will continue to
accumulate from the original redemption date to the date of
payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of
calculating the applicable Series D Redemption Price.
(f) Voting Rights.
(i) General. Holders of the Series D Preferred Units will
not have any voting rights or right to consent to any matter requiring the
consent or approval of the Limited Partners, except as otherwise expressly set
forth in the Partnership Agreement and except as set forth below.
(ii) Certain Voting Rights. So long as any Series D Preferred
Units remain outstanding, the Partnership shall not, without the affirmative
vote of the holders of at least two-thirds of the Series D Preferred Units
outstanding at the time (i) authorize or create, or increase the authorized or
issued amount of, any class or series of Partnership Interests ranking prior to
the Series D Preferred Units with respect to payment of distributions or rights
upon liquidation, dissolution or winding-up or create, authorize or issue any
obligations or security convertible into or evidencing the right to purchase any
such Partnership Interests, (ii) authorize or create, or increase the authorized
or issued amount of any Parity Preferred Units or reclassify any Partnership
Interest of the Partnership into any such Partnership Interest or create,
authorize or issue any obligations or security convertible into or evidencing
the right to purchase any such Partnership Interests but only to the extent such
Parity Preferred Units are issued to an affiliate of the Partnership, other than
(A) Security Capital U.S. Realty, Security Capital Holdings, S.A. or their
affiliates (if issued upon arm's length terms in the good faith determination of
the board of directors of the General Partner) or (B) the General Partner to the
extent the issuance of such interests was to allow the General Partner to issue
corresponding preferred stock to persons who are not affiliates of the
Partnership or (iii) either (A) consolidate, merge into or with, or convey,
transfer or lease its assets substantially as an entirety to, any corporation or
other entity or (B) amend, alter or repeal the provisions of the Partnership
Agreement, whether by merger, consolidation or otherwise, that would materially
and adversely affect the powers, special rights, preferences, privileges or
voting power of the Series D Preferred Units or the holders thereof; provided,
however, that with respect to the occurrence of a merger, consolidation or a
sale or lease of all of the Partnership's assets as an entirety, so long as (a)
the Partnership is the surviving entity and the Series D Preferred Units remain
outstanding with the terms thereof unchanged, or (b) the resulting, surviving or
transferee entity is a partnership, limited liability company or other
pass-through entity organized under the laws of any state and substitutes the
Series D Preferred Units for other interests in such entity having substantially
the same terms and rights as the Series D Preferred Units, including with
respect to distributions, voting rights and rights upon liquidation, dissolution
or winding-up, then the occurrence of any such event shall not be deemed to
materially and adversely affect such rights, privileges or voting powers of the
holders of the Series D Preferred Units and no vote of the Series D Preferred
Units shall be required in such case; and provided further that any increase in
the amount of Partnership Interests or the creation or issuance of any other
class or series of Partnership Interests,
11
in each case ranking (a) junior to the Series D Preferred Units with respect to
payment of distributions or the distribution of assets upon liquidation,
dissolution or winding-up, or (b) on a parity to the Series D Preferred Units
with respect to payment of distributions or the distribution of assets upon
liquidation, dissolution or winding-up to the extent such Partnership Interest
are not issued to an affiliate of the Partnership, other than the General
Partner to the extent the issuance of such interests was to allow the General
Partner to issue corresponding preferred stock to persons who are not affiliates
of the Partnership, shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers and no vote of the Series D
Preferred Units shall be required in such case.
(g) Exchange Rights.
(i) Right to Exchange.
(A) Series D Preferred Units will be exchangeable in
whole or in part at anytime on or after the tenth anniversary
of the date of issuance, at the option of the holders thereof,
for authorized but previously unissued shares of 9.125% Series
D Cumulative Redeemable Preferred Stock of the General Partner
(the "Series D Preferred Stock") at an exchange rate of one
share of Series D Preferred Stock for one Series D Preferred
Unit, subject to adjustment as described below (the "Series D
Exchange Price"), provided that the Series D Preferred Units
will become exchangeable at any time, in whole or in part, at
the option of the holders of Series D Preferred Units for
Series D Preferred Stock if (y) at any time full distributions
shall not have been made on the applicable Series D Preferred
Unit Distribution Payment Date on any Series D Preferred Unit
with respect to six (6) prior quarterly distribution periods,
whether or not consecutive, provided, however, that a
distribution in respect of Series D Preferred Units shall be
considered timely made if made within two (2) Business Days
after the applicable Series D Preferred Unit Distribution
Payment Date if at the time of such late payment there shall
not be any prior quarterly distribution periods in respect of
which full distributions were made more than two (2) Business
Days after the applicable Series D Preferred Unit Distribution
Payment Date or (z) upon receipt by a holder or holders of
Series D Preferred Units of (A) notice from the General
Partner that the General Partner or a Subsidiary of the
General Partner has taken the position that the Partnership
is, or upon the occurrence of a defined event in the immediate
future will be, a PTP and (B) an opinion rendered by an
outside nationally recognized independent counsel familiar
with such matters addressed to a holder or holders of Series D
Preferred Units, that the Partnership is or likely is, or upon
the occurrence of a defined event in the immediate future will
be or likely will be, a PTP. In addition, the Series D
Preferred Units may be exchanged for Series D Preferred Stock,
in whole or in part, at the option of any holder prior to the
tenth anniversary of the issuance date and after the third
anniversary thereof if such holder of a Series D Preferred
Units shall deliver to the General Partner either (i) a
private ruling letter addressed to such holder of Series D
Preferred Units or (ii) an opinion of independent counsel
reasonably acceptable to the General Partner based on the
enactment of temporary or final Treasury Regulations or the
publication of a Revenue
12
Ruling, in either case to the effect that an exchange of the
Series D Preferred Units at such earlier time would not cause
the Series D Preferred Units to be considered "stock and
securities" within the meaning of section 351(e) of the Code
for purposes of determining whether the holder of such Series
D Preferred Units is an "investment company" under section
721(b) of the Code if an exchange is permitted at such earlier
date. Furthermore, the Series D Preferred Units may be
exchanged in whole but not in part by any holder thereof which
is a real estate investment trust within the meaning of
Sections 856 through 859 of the Code for Series D Preferred
Stock (but only if the exchange in whole may be accomplished
consistently with the ownership limitations set forth under
Article 5 of the Articles of Incorporation (taking into
account exceptions thereto) if at any time (i) the Partnership
reasonably determines that the assets and income of the
Partnership for a taxable year after 1999 would not satisfy
the income and assets tests of Section 856 of the Code for
such taxable year if the Partnership were a real estate
investment trust within the meaning of the Code or (ii) any
such holder of Series D Preferred Units shall deliver to the
Partnership and the General Partner an opinion of independent
counsel reasonably acceptable to the General Partner to the
effect that, based on the assets and income of the Partnership
for a taxable year after 1999, the Partnership would not
satisfy the income and assets tests of Section 856 of the Code
for such taxable year if the Partnership were a real estate
investment trust within the meaning of the Code and that such
failure would create a meaningful risk that a holder of the
Series D Preferred Units would fail to maintain qualification
as a real estate investment trust.
(B) Notwithstanding anything to the contrary set
forth in Section 4.8(G)(i)(A), if an Series D Exchange Notice
(as defined herein) has been delivered to the General Partner,
then the General Partner may, at its option, elect to redeem
or cause the Partnership to redeem all or a portion of the
outstanding Series D Preferred Units for cash in an amount
equal to the original Capital Contribution per Series D
Preferred Unit and all accrued and unpaid distributions
thereon to the date of redemption. The General Partner may
exercise its option to redeem the Series D Preferred Units for
cash pursuant to this Section 4.8(g)(i)(B) by giving each
holder of record of Series D Preferred Units notice of its
election to redeem for cash, within five (5) Business Days
after receipt of the Series D Exchange Notice, by (i) fax, and
(ii) registered mail, postage paid, at the address of each
holder as it may appear on the records of the Partnership
stating (i) the redemption date, which shall be no later than
sixty (60) days following the receipt of the Series D Exchange
Notice, (ii) the redemption price, (iii) the place or places
where the Series D Preferred Units are to be surrendered for
payment of the redemption price, (iv) that distributions on
the Series D Preferred Units will cease to accrue on such
redemption date; (v) that payment of the redemption price will
be made upon presentation and surrender of the Series D
Preferred Units and (vi) the aggregate number of Series D
Preferred Units to be redeemed, and if fewer than all of the
outstanding Series D Preferred Units are to be redeemed, the
number of Series D Preferred Units to be redeemed held by such
holder, which number shall equal such holder's pro-rata share
(based on the percentage of the
13
aggregate number of outstanding Series D Preferred Units the
total number of Series D Preferred Units held by such holder
represents) of the aggregate number of Series D Preferred Units
being redeemed.
(C) Upon the occurrence of an event giving rise to
exchange rights pursuant to Section 4.8(g)(i)(A), in the event
an exchange of all or a portion of Series D Preferred Units
pursuant to Section 4.8(g)(i)(A) would violate the provisions
on ownership limitation of the General Partner set forth in
Article 5 of the Articles of Incorporation, the General
Partner shall give written notice thereof to each holder of
record of Series D Preferred Units, within five (5) Business
Days following receipt of the Series D Exchange Notice, by (i)
fax, and (ii) registered mail, postage prepaid, at the address
of each such holder set forth in the records of the
Partnership. In such event, each holder of Series D Preferred
Units shall be entitled to exchange, pursuant to the provision
of Section 4.8(g)(ii) a number of Series D Preferred Units
which would comply with the provisions on the ownership
limitation of the General Partner set forth in such Article 5
of the Articles of Incorporation and any Series D Preferred
Units not so exchanged (the "Series D Excess Units") shall be
redeemed by the Partnership for cash in an amount equal to the
original Capital Contribution per Series D Excess Unit, plus
any accrued and unpaid distributions thereon, whether or not
declared, to the date of redemption. The written notice of the
General Partner shall state (i) the number of Series D Excess
Units held by such holder, (ii) the redemption price of the
Series D Excess Units, (iii) the date on which such Series D
Excess Units shall be redeemed, which date shall be no later
than sixty (60) days following the receipt of the Series D
Exchange Notice, (iv) the place or places where such Series D
Excess Units are to be surrendered for payment of the Series D
Redemption Price, (iv) that distributions on the Series D
Excess Units will cease to accrue on such redemption date, and
(v) that payment of the redemption price will be made upon
presentation and surrender of such Series D Excess Units. In
the event an exchange would result in Series D Excess Units,
as a condition to such exchange, each holder of such units
agrees to provide representations and covenants reasonably
requested by the General Partner relating to (i) the widely
held nature of the interests in such holder, sufficient to
assure the General Partner that the holder's ownership of
stock of the General Partner (without regard to the limits
described above) will not cause any individual to own in
excess of 9.8% of the stock of the General Partner; and (ii)
to the extent such holder can so represent and covenant
without obtaining information from its owners, the holder's
ownership of tenants of the Partnership and its affiliates.
(D) The redemption of Series D Preferred Units
described in Section 4.8(g)(i)(B) and (C) shall be subject to
the provisions of Section 4.8(e)(ii)(A) and Section
4.8(e)(iii)(B); provided, however, that for purposes hereof
the term "Redemption Price" in Sections 4.8(e)(ii)(A) and
4.8(e)(iii)(B) shall be read to mean the original Capital
Contribution per Series D Preferred Unit being redeemed plus
all accrued and unpaid distributions to the redemption date.
14
(ii) Procedure for Exchange.
(B) Any exchange shall be exercised pursuant to a
notice of exchange (the "Series D Exchange Notice") delivered
to the General Partner by the holder who is exercising such
exchange right, by (i) fax and (ii) by certified mail postage
prepaid. Upon request of the General Partner, such holder
delivering the Series D Exchange Notice shall provide to the
General Partner in writing such information as the General
Partner may reasonably request to determine whether any
portion of the exchange by the delivering holder will result
in the violation of the restrictions of Article 5 of the
Articles of Incorporation, including the Ownership Limit and
the Related Tenant Limit. The exchange of Series D Preferred
Units, or a specified portion thereof, may be effected after
the fifth (5th) Business Days following receipt by the General
Partner of the Series D Exchange Notice and such requested
information by delivering certificates, if any, representing
such Series D Preferred Units to be exchanged together with,
if applicable, written notice of exchange and a proper
assignment of such Series D Preferred Units to the office of
the General Partner maintained for such purpose. Currently,
such office is 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxxxx, Xxxxxxx 00000. Each exchange will be deemed to
have been effected immediately prior to the close of business
on the date on which such Series D Preferred Units to be
exchanged (together with all required documentation) shall
have been surrendered and notice shall have been received by
the General Partner as aforesaid and the Series D Exchange
Price shall have been paid. Any Series D Preferred Stock
issued pursuant to this Section 4.8(g) shall be delivered as
shares which are duly authorized, validly issued, fully paid
and nonassessable, free of pledge, lien, encumbrance or
restriction other than those provided in the Articles of
Incorporation, the Bylaws of the General Partner, the
Securities Act and relevant state securities or blue sky laws.
(B) In the event of an exchange of Series D
Preferred Units for shares of Series D Preferred Stock, an
amount equal to the accrued and unpaid distributions which are
not paid pursuant to Section 4(a) hereof, whether or not
declared, to the date of exchange on any Series D Preferred
Units tendered for exchange shall (i) accrue and be payable by
the General Partner from and after the date of exchange on the
shares of the Series D Preferred Stock into which such Series D
Preferred Units are exchanged, and (ii) continue to accrue on
such Series D Preferred Units, which shall remain outstanding
following such exchange, with the General Partner as the
holder of such Series D Preferred Units. Notwithstanding
anything to the contrary set forth herein, in no event shall a
holder of a Series D Preferred Unit that was validly exchanged
into Series D Preferred Stock pursuant to this section (other
than the General Partner now holding such Series D Preferred
Unit), receive a distribution out of Available Cash or Capital
Transaction Proceeds of the Partnership with respect to any
Series D Preferred Units so exchanged.
(C) Fractional shares of Series D Preferred Stock
are not to be issued upon exchange but, in lieu thereof, the
General Partner will pay a cash adjustment based
15
upon the fair market value of the Series D Preferred Stock on
the day prior to the exchange date as determined in good faith
by the Board of Directors of the General Partner.
(iii) Adjustment of Exchange Price.
(A) The Series D Exchange Price is subject to
adjustment upon certain events, including, (i) subdivisions,
combinations and reclassification of the Series D Preferred
Stock, and (ii) distributions to all holders of Series D
Preferred Stock of evidences of indebtedness of the General
Partner or assets (including securities, but excluding
dividends and distributions paid in cash out of equity
applicable to Series D Preferred Stock).
(B) In case the General Partner shall be a party to
any transaction (including, without limitation, a merger,
consolidation, statutory share exchange, tender offer for all
or substantially all of the General Partner's capital stock or
sale of all or substantially all of the General Partner's
assets), in each case as a result of which the Series D
Preferred Stock will be converted into the right to receive
shares of capital stock, other securities or other property
(including cash or any combination thereof), each Series D
Preferred Unit will thereafter be exchangeable into the kind
and amount of shares of capital stock and other securities and
property receivable (including cash or any combination
thereof) upon the consummation of such transaction by a holder
of that number of shares of Series D Preferred Stock or
fraction thereof into which one Series D Preferred Unit was
exchangeable immediately prior to such transaction. The
General Partner may not become a party to any such transaction
unless the terms thereof are consistent with the foregoing.
(C) So long as a Preferred Partner or any of its
permitted successors or assigns holds any Series D Preferred
Units as the case may be, the General Partner shall not,
without the affirmative vote of the holders of at least
two-thirds of the Series D Preferred Units (excluding any
Series D Preferred Units surrendered to the General Partner in
exchange for Series D Preferred Stock) and Series D Preferred
Stock (voting together as a class on the basis of number of
shares into which Series D Preferred Units are exchangeable)
outstanding at the time: (a) designate or create, or increase
the authorized or issued amount of, any class or series of
shares ranking senior to the Series D Preferred Stock with
respect to the payment of distributions or rights upon
liquidation, dissolution or winding-up or reclassify any
authorized shares of the General Partner into any such shares,
or create, authorize or issue any obligations or securities
convertible into or evidencing the right to purchase any such
shares; (b) designate or create, or increase the authorized or
issued amount of, any Parity Preferred Stock or reclassify any
authorized shares of the General Partner into any such shares,
or create, authorize or issue any obligations or security
convertible into or evidencing the right to purchase any such
shares, but only to the extent that such Parity Preferred
Stock are issued to an Affiliate of the General Partner other
than (A) Security Capital U.S.
16
Realty, Security Capital Holdings, S.A. or their affiliates (if
issued on arm's length terms in the good faith determination of
the board of directors of the General Partner), or (B) the
General Partner to the extent the issuance of such interests was
to allow the General Partner to issue corresponding preferred
stock in the same transaction to persons who are not affiliates
of the Partnership; (c) amend, alter or repeal the provisions of
the Charter or bylaws of the General Partner, whether by merger,
consolidation or otherwise, that would materially and adversely
affect the powers, special rights, preferences, privileges or
voting power of the Series D Preferred Stock or the holders
thereof; provided, however, that any increase in the amount of
authorized Preferred Stock or the creation or issuance of any
other series or class of Preferred Stock, or any increase in the
amount of authorized shares of each class or series, in each
case ranking either (1) junior to the Series D Preferred Stock
with respect to the payment of distributions or the distribution
of assets upon liquidation, dissolution or winding-up, or (2) on
a parity with the Series D Preferred Stock with respect to the
payment of distributions or the distribution of assets upon
liquidation, dissolution or winding-up to the extent such
Preferred Stock are not issued to an Affiliate of the General
Partner (other than Security Capital U.S. Realty, Security
Capital Holdings, S.A. or their affiliates if issued on arm's
length terms in the good faith determination of the board of
directors of the General Partner), or (B) General Partner to the
extent the issuance of such interests was to allow the General
Partner to issue corresponding preferred stock to persons who
are not affiliates of the Partnership, shall not be deemed to
materially and adversely affect such rights, preferences,
privileges or voting powers.
(h) No Conversion Rights. The holders of the Series D
Preferred Units shall not have any rights to convert such shares into shares of
any other class or series of stock or into any other securities of, or interest
in, the Partnership.
(i) No Sinking Fund. No sinking fund shall be established
for the retirement or redemption of Series D Preferred Units."
Section 6. Article 7 - Management and Operating of
Business.
Section 7.1(h) is hereby amended by inserting the words
"Series A Priority Return, Series D Priority Return and" before the words
"Priority Distribution Amount" therein.
Section 7. Article 8 - Rights and Obligations of Limited
Partners.
Section 8.4 is hereby amended by (i) inserting the words
"Section 4.8," after the words "Section 4.5," therein and (ii) inserting the
words "Preferred Units" after the words "Series A" therein.
17
Section 8. Article 11 - Transfers and Withdrawals.
(a) Section 11.2(b) is hereby amended by inserting the words
"and Section 4.8(f)" after the words "4.5(f)" in the first sentence thereof.
(b) The Series A Preferred Partners and Series D Preferred
Partners may, subject to Sections 11.3(b)-(j), assign their Units to any Person,
and any such assignee shall be admitted as a Substituted Limited Partner.
(c) Section 11.3(h) is hereby amended by adding the
following at the end of the section:
"; provided, however, that the General Partner shall not
unreasonably withhold its consent to a waiver of the
limitations set forth in this Section 11.3(h) if the
Partnership is (1) relying on a provision other than Treasury
Regulation Section 1.7704-1(h) to avoid classification of
Partnership as a PTP or (2) a PTP."
(d) The following is inserted as a new Section 11.3(j):
"(j) Transfers by Series D Preferred Partners. In addition to
the other restrictions on transfer set forth in this Article
11, which apply to Series D Preferred Units, no transfer of
the Series D Preferred Units may be made without the consent
of the General Partner, which consent may be given or withheld
in its sole and absolute discretion, if such transfer would
result in more than four partners holding all outstanding
Series D Preferred Units within the meaning of Regulation
Section 1.7704-1(h)(3) "; provided, however, that the General
Partner shall not unreasonably withhold its consent to a
waiver of the limitations set forth in this Section 11.3(j) if
the Partnership is (1) relying on a provision other than
Treasury Regulation Section 1.7704-1(h) to avoid
classification of Partnership as a PTP or (2) a PTP."
Section 9. Article 12 - Admission of Partners.
Section 12.2(a) and 12.4 are hereby amended by deleting all
references therein to "Additional Limited Partners" and inserting the words
"additional Limited Partners" therefor.
Section 10. Article 13 - Dissolution and Liquidation.
(a) The first reference to "Additional Limited Partners" in
the first paragraph of Section 13.1 is hereby deleted and the
words "additional Limited Partners" are hereby inserted in
lieu thereof.
18
(b) Clause (iii) of Section 13.2(a) is hereby deleted and
the following inserted in lieu thereof:
"(iii) Third, one hundred percent (100%) to the Series A
Preferred Partners in accordance with the provisions of
Section 4.5(d) and to the Series D Preferred Partners in
accordance with the provisions of Section 4.8(d)."
(c) The words "and Section 4.8 with respect to the Series D
Preferred Units" is hereby inserted after the words "Section
4.5 with respect to the Series A Preferred Units" in Section
13.6.
Section 11. Article 14 - Amendment of Partnership Agreement;
Meetings.
(a) Sections 14.1(a), 14.1(c) and 14.1(d) are hereby amended
by inserting the words "and 4.8(f)(ii)" after each reference to "4.5(f)(ii)"
therein.
(b) Section 14.1(c) is hereby amended by replacing the words
"Series A Preferred Partner" with the words "holder of Parity Preferred Units."
(c) The last paragraph of Section 14.1(g) is hereby amended
by replacing the words "Series A Preferred Partners" with the words "holders of
Parity Preferred Units."
Section 12. Miscellaneous.
(a) Notwithstanding anything to the contrary contained in
Section 8.6 of the Partnership Agreement, in no event shall the rights of the
holders of the Series D Preferred Units set forth in Section 5 of this Amendment
be subordinate to the Redemption Rights set forth in Section 8.6 of the
Partnership Agreement.
(b) The Partnership and the General Partner represent and
warrant that the issuance of the Series D Preferred Units pursuant to this
Amendment is permitted pursuant to Section 4.2(b)(i).
(c) The Partnership and General Partner (i) represent and
warrant that, except as disclosed on Schedule 1 attached hereto, no Redemption
Rights contemplated in Section 8.6 require the Partnership or General Partner to
pay cash in lieu of the Share Amount in exchange for Units (other than at the
election of the Partnership or General Partner) and (ii) covenant and agree not
to grant, without the consent of the Series A Preferred Partners and Series D
Preferred Partners, any Redemption Rights requiring the Partnership or General
Partner to pay cash in lieu
19
of the Share Amount in exchange for Units (other than at the election of the
Partnership or General Partner) except (i) redemption rights assumed by
Partnership or General Partner in connection with the acquisition of an existing
operating partnership and (ii) redemption rights as to less than 5% of the
Common Units arising from a tender offer by the Partnership intended to reduce
the number of partners of the Partnership, unless (i) the cash used to
effectuate any such cash redemption is raised from the issuance of Common Stock
of the General Partner issued for such purpose or (ii) the Partnership shall
allow the holders of the Series A Preferred Units and Series D Preferred Units
to redeem their Units for the Series A Redemption Price and Series D Redemption
Price, respectively, immediately prior to the time of such other redemption.
Section 13. Fourth Amended and Restated Agreement of Limited
Partnership.
The form of Fourth Amended and Restated Agreement of Limited
Partnership (the "Restated Form") attached to the Partnership Agreement is
hereby amended to conform to the amendments set forth in this Amendment, all of
which shall be deemed incorporated in said Fourth Amended and Restated Agreement
of Limited Partnership (the "Restated Agreement") upon the effectiveness thereof
(with such conforming changes as may be necessary to give substantive effect
thereto). Additionally, the Restated Agreement Form and, upon its effectiveness,
the Restated Agreement are hereby amended as follows:
(a) Section 4.2(b)(i)(A) is hereby amended by inserting the
words "subject to Sections 4.5(f)(ii) and 4.8(f)(ii)," at the beginning of
clause (ii);
(b) Section 4.2(b)(i)(B) is hereby amended by inserting the
words "and Sections 4.5(f)(ii) and 4.8(f)(ii) after the reference to "Section
14.1(g)(ii)" in clause (ii);
(c) Section 13.4(c) is hereby amended by inserting the words
"subject to the priorities set forth in Section 13.2(a)" after the word
"balances" at the end of the next to last sentence thereof; and
(d) Section 14.1(g) is hereby amended by inserting the
following at the end thereof:
"Nothing contained in Section 14(g) shall be deemed to modify
or affect the rights, preferences and priorities of the Series
A Preferred Partners and Series D Preferred Partners as to
distributions and allocations."
Section 14. Reaffirmation. Except as modified herein, all
terms and conditions of the Partnership Agreement shall remain in full force and
effect, which terms and conditions the General Partner hereby ratifies and
affirms.
20
IN WITNESS WHEREOF, this Amendment has been executed as of the
date first above written.
GENERAL PARTNER
Regency Realty Corporation
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
BELAIR REAL ESTATE CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
BELCREST REALTY CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
Regency Centers, L.P.
Amendment No. 2 to Third Amended and Restated Agreement of
Limited Partnership (the "Partnership Agreement")
Relating to 9.0% Series C Cumulative Redeemable Preferred Units
Section 1. Definitions. Capitalized terms used and not otherwise
defined herein shall have the meaning assigned thereto in the Partnership
Agreement. For purposes of this Amendment the term "Series C Limited Partner"
shall mean a Limited Partner holding Series C Preferred Units. The term "Parity
Preferred Units" shall be used to refer to Series A Preferred Units, Series B
Preferred Units, Series C Preferred Units (as hereafter defined) and any class
or series of Partnership Interests of the Partnership now or hereafter
authorized, issued or outstanding expressly designated by the Partnership to
rank on a parity with Series A Preferred Units or Series B Preferred Units with
respect to distributions or rights upon voluntary or involuntary liquidation,
winding-up or dissolution of the Partnership, or both, as the context may
require, whether or not the dividend rates, dividend payment dates or redemption
or liquidation prices per unit or conversion rights or exchange rights shall be
different from those of the Series A Preferred Units. The term "Series C
Priority Return" shall mean, an amount equal to 9.0% per annum, determined on
the basis of a 360 day year of twelve 30 day months (or actual days for any
month which is shorter than a full monthly period), cumulative to the extent not
distributed for any given distribution period, of the stated value of $100.00
per Series C Preferred Unit, commencing on the date of issuance of such Series C
Preferred Unit. The Partnership Agreement shall be amended to add such
definitions, and shall be further amended to add the following definition:
"Priority Returns" means the Series A Priority Return, the Series B Priority
Return and the Series C Priority Return or similar amount payable with respect
to any other Parity Preferred Units. The term "Junior Stock" means any class or
series of capital stock of the General Partner ranking junior as to the payment
of distributions or rights upon voluntary or involuntary liquidation, winding up
or dissolution of the General Partner to the Series C Preferred Stock or other
Parity Preferred Shares. The term "PTP" shall mean a "publicly traded
partnership" within the meaning of Section 7704 of the Code (as hereafter
defined). The final Paragraph in the definition of "Net Income" and "Net Loss"
in the Partnership Agreement shall be restated in its entirety as follows (new
language is underscored):
"Solely for purposes of allocating Net Income or Net Loss in
any Fiscal Year to the holders of the Parity Preferred Units,
items of Net Income and Net Loss, as the case may be, shall
not include Depreciation with respect to properties (or
groupings of properties selected by the General Partner using
any method determined by it to be reasonable) that are
"ceiling limited" in respect of the holders of the Parity
Preferred Units. For purposes of the preceding sentence,
Partnership property shall be considered ceiling limited in
respect of a holder of Parity Preferred Units if Depreciation
attributable to such Partnership property which would
otherwise be allocable to such Partner, without regard to this
paragraph, exceeded depreciation determined
for federal income tax purposes attributable to such Partnership
property which would otherwise be allocated to such Partner by
more than 5%."
Section 2. Designation and Number. A series of Partnership Units in
the Partnership designated as the "9.0% Series C Cumulative Redeemable Preferred
Units" (the "Series C Preferred Units") is hereby established. The number of
Series C Preferred Units shall be 750,000.
Section 3. Rank.
(a) The Series C Preferred Units will, with respect to
distributions or rights upon voluntary or involuntary liquidation, winding-up or
dissolution of the Partnership, or both, rank senior to all classes or series of
Partnership Interests now or hereafter authorized, issued or outstanding other
than any class or series of equity securities of the Partnership issued after
the issuance of the Series C Preferred Units and expressly designated in
accordance with the Partnership Agreement as ranking on a parity with the Series
C Preferred Units as to distributions or rights upon voluntary or involuntary
liquidation, winding-up or dissolution of the Partnership, or both. The Series C
Preferred Units are expressly designated as ranking on a parity with the Series
A Preferred Units and the Series B Preferred Units.
(b) The last sentence of Section 4.1(a) of the Partnership
Agreement shall be amended to read in full as follows (new language is
underscored):
Any Partnership Interests held by the General Partner or any
Affiliate other than a Property Affiliate (including
Partnership Interests acquired under Sections 4.2, 8.6 and
8.7) shall be Class B Units, other than Parity Preferred
Units, the issuance of which has been approved by the Limited
Partners pursuant to Section 4.2, and any Preferred Units
issued pursuant to Section 4.2(b)(i).
Section 4. Distributions.
(a) Payment of Distributions. Subject to the rights of
holders of Parity Preferred Units, holders of Series C Preferred Units shall be
entitled to receive, out of Available Cash and Capital Transaction Proceeds,
cumulative preferential cash distributions at the rate per annum of 9.0% of the
original Capital Contribution per Series C Preferred Unit. Such distributions
shall be cumulative, shall accrue from the original date of issuance and will be
payable in cash when, as and if declared by the Partnership acting through the
General Partner, (A) quarterly in arrears, on or before March 31, June 30,
September 30 and December 31 of each year commencing on September 30, 1999 and
(B) in the event of (i) an exchange of Series C Preferred Units into Series C
Preferred Stock, or (ii) a redemption of Series C Preferred Units, on the
exchange date or redemption date, as applicable (each a "Series C Preferred Unit
Distribution Payment Date"). The amount of the distribution payable for any
period will be computed on the basis of a 360-day year of twelve 30-day months
and for any period shorter than a full quarterly period for which distributions
are
2
computed, the amounts of the distribution payable will be computed based on the
ratio of the actual number of days elapsed in the quarterly period to ninety
(90) days. If any date on which distributions are to be made on the Series C
Preferred Units is not a Business Day (as defined herein), then payment of the
distribution to be made on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date.
Distributions on the Series C Preferred Units will be made to the holders of
record of the Series C Preferred Units on the relevant record dates to be fixed
by the Partnership acting through the General Partner, which record dates shall
be not less than ten (10) days and not more than thirty (30) Business Days prior
to the relevant Preferred Unit Distribution Payment Date (the "Series C
Preferred Unit Partnership Record Date").
The term "Business Day" shall mean each day, other than a Saturday or a
Sunday, which is not a day on which banking institutions in New York, New York
are authorized or required by law, regulation or executive order to close.
(b) Distributions Cumulative. Distributions on the Series C
Preferred Units will accrue whether or not the terms and provisions of any
agreement of the Partnership, including any agreement relating to its
indebtedness at any time prohibit the current payment of distributions, whether
or not the Partnership has earnings, whether or not there are funds legally
available for the payment of such distributions and whether or not such
distributions are authorized or declared. Accrued but unpaid distributions on
the Series C Preferred Units will accumulate as of the Series C Preferred Unit
Distribution Payment Date on which they first become payable. Distributions on
account of arrears for any past distribution periods may be declared and paid at
any time, without reference to a regular Series C Preferred Unit Distribution
Payment Date to holders of record of the Series C Preferred Units on the record
date fixed by the Partnership acting through the General Partner which date
shall be not less than ten (10) days and not more than thirty (30) Business Days
prior to the payment date. Accumulated and unpaid distributions will not bear
interest.
(c) Priority as to Distributions.
(i) So long as any Series C Preferred Units are
outstanding, no distribution of cash or other property shall be authorized,
declared, paid or set apart for payment on or with respect to any class or
series of Partnership Interests of the Partnership ranking junior as to the
payment of distributions to Parity Preferred Units (collectively, "Junior
Units"), nor shall any cash or other property be set aside for or applied to the
purchase, redemption or other acquisition for consideration of any Series C
Preferred Units, any Parity Preferred Units with respect to distributions or any
Junior Units, unless, in each case, all distributions accumulated on all Series
C Preferred Units and all classes and series of outstanding Parity Preferred
Units as to payment of distributions have been paid in full. The foregoing
sentence will not prohibit (a) distributions payable solely in Junior Units, (b)
the conversion of Junior Units or Parity Preferred Units into Partnership
Interests of the
3
Partnership ranking junior to the Series C Preferred Units as to distributions,
or (c) the redemption of Partnership Interests corresponding to any Series C
Preferred Stock, Parity Preferred Stock with respect to distributions or Junior
Stock to be purchased by the General Partner pursuant to Article 5 of the
Articles of Incorporation of the General Partner (the "Charter") to preserve the
General Partner's status as a real estate investment trust, provided that such
redemption shall be upon the same terms as the corresponding purchase pursuant
to Article 5 of the Charter.
(ii) So long as distributions have not been paid in
full (or a sum sufficient for such full payment is not irrevocably deposited in
trust for payment) upon the Series C Preferred Units, all distributions
authorized and declared on the Series C Preferred Units and all classes or
series of outstanding Parity Preferred Units with respect to distributions shall
be authorized and declared so that the amount of distributions authorized and
declared per Series C Preferred Unit and such other classes or series of Parity
Preferred Units shall in all cases bear to each other the same ratio that
accrued distributions per Series C Preferred Unit and such other classes or
series of Parity Preferred Units (which shall not include any accumulation in
respect of unpaid distributions for prior distribution periods if such classes
or series of Parity Preferred Units do not have cumulative distribution rights)
bear to each other.
(d) No Further Rights. Holders of Series C Preferred Units
shall not be entitled to any distributions, whether payable in cash, other
property or otherwise, in excess of the full cumulative distributions described
herein.
(e) Section 5.1(c) of the Partnership Agreement shall be
amended to read in full as follows (new language is underscored):
"Anything herein to the contrary notwithstanding, subject to
Section 4(d)(i) of Amendment No. 2 to this Agreement, no
Available Cash or Capital Transaction Proceeds shall be
distributed pursuant to Section 5.1(a), Section 5.1(b) or any
other provisions of this Article 5 unless all distributions
accumulated on all Series A Preferred Units pursuant to
Section 4.5 have been paid in full and unless all
distributions accumulated on any other outstanding Preferred
Units have been paid in full."
Section 5. Allocations.
(a) Section 6.1(a) and 6.1(b) of the Agreement are hereby
deleted and the following inserted as new Sections 6.1(a) and 6.1(b) in lieu
thereof (new language is underscored):
Section 6.1 Allocations of Net Income and Net Loss. For
purposes of maintaining the Capital Accounts and in determining the
rights of the Partners among themselves, the Partnership's Net Income
and Net Loss shall be allocated among the Partners for each taxable
year (or portion thereof) as provided herein below.
4
(a) Net Income. After giving effect to the special
allocations set forth in Section 6.2 below, Net Income shall
be allocated as follows (and for this purpose, the holders of
Class A Units shall be treated as if they were Original
Limited Partners):
(i) First, one hundred percent (100%) to the
General Partner in an amount equal to the excess, if
any, of (A) the cumulative Net Losses allocated to
the General Partner pursuant to Section 6.1(b)(ix)
and the last sentence of Section 6.1(b) for all prior
fiscal years, over (B) the cumulative Net Income
allocated pursuant to this Section 6.1(a)(i) for all
prior fiscal years;
(ii) Second, one hundred percent (100%) to
the holders of Parity Preferred Units in an amount
equal to the excess, if any, of (A) the cumulative
Net Losses allocated to the holders of Parity
Preferred Units pursuant to Section 6.1(b)(viii) for
all prior fiscal years, over (B) the cumulative Net
Income allocated pursuant to this Section 6.1(a)(ii),
including any amounts allocated pursuant to Section
6.2(g) which were attributable to this Section
6.1(a)(ii), for all prior fiscal years;
(iii) Third, one hundred percent (100%) to
the Original Limited Partners in an amount equal to
the excess, if any, of (A) the cumulative Net Losses
allocated to such Partners pursuant to Section
6.1(b)(iv) for all prior fiscal years, over (B) the
cumulative Net Income allocated pursuant to this
Section 6.1(a)(iii) for all prior fiscal years, which
amount shall be allocated among such Partners in the
same proportions and in the reverse order as the Net
Losses were allocated pursuant to Section 6.1(b)(iv);
(iv) Fourth, one hundred percent (100%) to
the Original Limited Partners in an amount equal to
the excess, if any, of (A) the cumulative Net Losses
allocated to such Partners pursuant to Section
6.1(b)(iii) for all prior fiscal years, over (B) the
cumulative Net Income allocated pursuant to this
Section 6.1(a)(iv) for all prior fiscal years, which
amount shall be allocated among such Partners in the
same proportions and in the reverse order as the Net
Losses were allocated pursuant to Section
6.1(b)(iii);
(v) Fifth, one hundred percent (100%) to the
holders of Parity Preferred Units until the holders
of Parity Preferred Units have been allocated an
amount equal to the excess of their respective
cumulative Priority Returns through the last day of
the current fiscal year (determined without reduction
for distributions made to date in satisfaction
thereof) over the cumulative Net Income allocated to
the holders of Parity Preferred Units pursuant to
this Section 6.1(a)(v),
5
including any amounts allocated pursuant to Section
6.2(g) which were attributable to this Section
6.1(a)(v), for all prior periods;
(vi) Sixth, one hundred percent (100%) to
the Original Limited Partners until the cumulative
allocations of Net Income to each Original Limited
Partner under this Section 6.1(a)(vi) for the current
and all prior fiscal years equal the cumulative
distributions paid to the Original Limited Partner
pursuant to Section 5.1(a)(i) and Section 13.2(a)(iv)
, provided, however, in the case of Original Limited
Partners other than Class Z Branch Partners, no
allocations of Net Income shall be made under this
Section 6.1(a)(vi) to such Limited Partners with
respect to distributions made under Section 5.1(a)(i)
and Section 13.2(a)(iv) after the Third Amendment
Date;.
(vii) Seventh, one hundred percent (100%) to
the Original Limited Partners until the cumulative
allocations of Net Income to each Original Limited
Partner under this Section 6.1(a)(vii) for the
current and all prior fiscal years equal the sum of
the cumulative amounts credited to such Partner's
Cumulative Unpaid Priority Distribution Account and
Cumulative Unpaid Accrued Return Account for the
current and all prior fiscal years, provided,
however, in the case of Original Limited Partners
other than Class Z Branch Partners, no allocations of
Net Income shall be made under this Section
6.1(a)(vii) with respect to amounts credited to such
Partners' Cumulative Unpaid Priority Distribution
Accounts and Cumulative Unpaid Accrued Return
Accounts after the Third Amendment Date;
(viii) Eighth, one hundred percent (100%) to
the Additional Limited Partners in an amount equal to
the excess, if any, of (A) the cumulative Net Losses
allocated to the Additional Limited Partners pursuant
to Section 6.1(b)(vii) for all prior fiscal years,
over (B) the cumulative Net Income allocated pursuant
to this Section 6.1(a)(viii) for all prior fiscal
years, which amount shall be allocated among the
Additional Limited Partners in the same proportions
and in the reverse order as the Net Losses were
allocated pursuant to Section 6.1(b)(vii);
(ix) Ninth, one hundred percent (100%) to
the Additional Limited Partners in an amount equal to
the excess, if any of (A) the cumulative Net Losses
allocated to the Additional Limited Partners pursuant
to Section 6.1(b)(vi) for all prior fiscal years,
over (B) the cumulative Net Income allocated pursuant
to this Section 6.1(a)(ix) for all prior fiscal
years, which amount shall be allocated among such
Partners in the same proportions and in the reverse
order as the Net Losses were allocated pursuant to
Section 6.1(b)(vi);
6
(x) Tenth, one hundred percent (100%) to the
Additional Limited Partners until the cumulative
allocations of Net Income to each Additional Limited
Partner under this Section 6.1(a)(x) for the current
and all prior fiscal years equal the cumulative
distributions paid to the Additional Limited Partners
pursuant to Section 5.1(a)(iv) and Section
13.2(a)(v), provided, however, in the case of
Additional Limited Partners other than Class Z
Midland Partners, no allocations of Net Income shall
be made under this Section 6.1(a)(x) to such Limited
Partners with respect to distributions made under
Section 5.1(a)(iv) and Section 13.2(a)(v) after the
Third Amendment Date;
(xi) Eleventh, one hundred percent (100%) to
the Additional Limited Partners until the cumulative
allocations of Net Income to each Additional Limited
Partner under this Section 6.1(a)(xi) for the current
and all prior fiscal years equal the sum of (A) the
cumulative amounts credited to such Partner's
Cumulative Unpaid Priority Distribution Account and
Cumulative Unpaid Accrued Return Account for the
current and all prior fiscal years and (B) the
cumulative Net Losses allocated to the Additional
Limited Partner pursuant to Section 6.1(b)(v) for all
prior fiscal years, provided, however, in the case of
Additional Limited Partners other than Class Z
Midland Partners, no allocation of Net Income shall
be made under this Section 6.1(a)(xi) with respect to
amounts credited to such Partners' Cumulative Unpaid
Priority Distribution Accounts and Cumulative Unpaid
Accrued Return Accounts after the Third Amendment
Date; and
(xii) Thereafter, to the Original and
Additional Limited Partners other than Class Z Branch
Partners or Class Z Midland Partners, to the General
Partner and to any other holders of Class B Units,
pro rata in accordance with the relative amounts of
Available Cash and Capital Transaction Proceeds
distributed to each of them during the taxable year.
(b) Net Losses. After giving effect to the special
allocations set forth in Section 6.2 below, Net Losses shall
be allocated as follows:
(i) First, one hundred percent (100%) to the
Original and Additional Limited Partners other than
Class Z Branch Partners or Class Z Midland Partners,
to the General Partner and the Class B Unit holders
in an amount equal to the excess, if any, of (A) the
cumulative Net Income allocated pursuant to Section
6.1(a)(xii) hereof for all prior fiscal years in
excess of distributions of Available Cash to such
Partners for which no corresponding allocation of Net
Income had been made (or is required to be made)
under Sections 6.1(a)(i)-(xi) hereof, over (B) the
7
cumulative Net Losses allocated pursuant to this
Section 6.1(b)(i) for all prior fiscal years;
(ii) Second, to the Original Limited
Partners until the cumulative allocations of Net
Losses under this Section 6.1(b)(ii) equal the
excess, if any, of the cumulative allocations of Net
Income under Section 6.1(a)(vii) to such Partners for
all prior fiscal years over the cumulative
distributions to such Partners under Section
5.1(a)(ii) and (iii) and Section 5.1(b)(i) and (ii)
for the current and all prior fiscal years (such
allocation being made in proportion to such Partners'
respective excess amounts);
(iii) Third, to the Original Limited
Partners with positive Adjusted Capital Account
balances (determined, solely for purposes of this
Section 6.1(b)(iii), without regard to any obligation
of a Partner to restore a negative Capital Account
under Section 13.4), in proportion to such balances,
until such balances are reduced to zero;
(iv) Fourth, to the Original Limited
Partners in proportion to their relative Percentage
Interests; provided, however, that to the extent that
an allocation under this Section 6.1(b)(iv) would
cause or increase an Adjusted Capital Account Deficit
for such Partner, such Net Loss shall be allocated to
those Original Limited Partners (in proportion to
their relative Percentage Interests) for whom such
allocation would not cause or increase an Adjusted
Capital Account Deficit;
(v) Fifth, to the Additional Limited
Partners until the cumulative allocations of Net
Losses under this Section 6.1(b)(v) equal the excess,
if any, of the cumulative allocations of Net Income
under Section 6.1(a)(xi) to such Partners for all
prior fiscal years over the cumulative distributions
to such Partners under Section 5.1(a)(v) and (vi) and
Section 5.1(b)(iii) and (iv) for the current and all
prior fiscal years (such allocation being made in
proportion to such Partners' respective excess
amounts);
(vi) Sixth, to the Additional Limited
Partners with positive Adjusted Capital Accounts
balances (determined, solely for purposes of this
Section 6.1(b)(vi), without regard to any obligation
of a Partner to restore a negative Capital Account
under Section 13.4), in proportion to such balances,
until such balances are reduced to zero;
(vii) Seventh, to the Additional Limited
Partners in proportion to their relative Percentage
Interests; provided, however, that to the extent that
an allocation under this Section 6.1(b)(vii) would
cause or increase an Adjusted Capital Account Deficit
for such Partner, such Net Loss shall be allocated to
those Additional Limited Partners (in
8
proportion to their relative Percentage Interests) for
whom such allocation would not cause or increase an
Adjusted Capital Account Deficit;
(viii) Eighth, to the holders of Parity
Preferred Units until their respective Adjusted
Capital Account Balance (determined, solely for
purposes of this Section 6.1(b)(viii), without regard
to any obligation of a Partner to restore a negative
Capital Account under Section 13.4), has been reduced
to zero; and
(ix) Any remaining Net Loss shall be
allocated to the General Partner and any other
holders of Class B Units.
Notwithstanding the foregoing, Net Losses shall not be allocated to any
Limited Partner pursuant to this Section 6.1(b)(ix) to the extent that
such allocation would cause such Limited Partner to have an Adjusted
Capital Account Deficit at the end of such taxable year (or increase
any existing Adjusted Capital Account Deficit). All Net Losses in
excess of the limitations set forth in the preceding sentence of this
Section 6.1(b) shall be allocated to the General Partner.
(b) Section 6.2(g) of the Agreement is hereby deleted and
the following inserted as new Section 6.2(g) in lieu thereof (new language is
underscored):
(g) Capital Account Adjustments. Notwithstanding
anything herein to the contrary other than the last sentence
of Section 14.1(g), any gain or loss arising from an
adjustment to the Gross Asset Value of any Partnership asset
pursuant to clause (b) or (c) of the definition thereof shall
be allocated (i) first, to the holders of the Parity Preferred
Units, but only to the extent that they would have been
allocated such gain pursuant to Section 6.1(a)(ii) or Section
6.1(a)(v) of this Agreement or such loss pursuant to Section
6.1(b)(viii) of this Agreement, as applicable, if such gain or
loss had been actually realized; and (ii) second, and subject
to Section 6.2(h) hereof, one hundred percent (100%) of the
remainder of such gain or loss to the General Partner and the
Additional Limited Partners (other than holders of Parity
Preferred Units) pro rata in accordance with the relative
number of Units held by each; provided, however, that for this
purpose, the General Partner shall be treated as owning all of
the outstanding Class A Units and all of the outstanding
Original Limited Partnership Units in addition to the actual
number of Units which the General Partner holds. An Additional
Limited Partner (except for holders of Parity Preferred
Units), at the time of admission to the Partnership, may elect
with the consent of the General Partner to not receive special
allocations of any gain or loss resulting from such
adjustments.
9
Section 6. Liquidation Preference.
(a) Payment of Liquidating Distributions. Subject to the
rights of holders of Parity Preferred Units with respect to rights upon any
voluntary or involuntary liquidation, dissolution or winding-up of the
Partnership and subject to Partnership Interests ranking senior to the Series C
Preferred Units with respect to rights upon any voluntary or involuntary
liquidation, dissolution or winding up of the Partnership, the holders of Series
C Preferred Units shall be entitled to receive out of the assets of the
Partnership legally available for distribution or the proceeds thereof, after
payment or provision for debts and other liabilities of the Partnership, but
before any payment or distributions of the assets shall be made to holders of
any class or series of Partnership Interest that ranks junior to the Series C
Preferred Units as to rights upon liquidation, dissolution or winding-up of the
Partnership, an amount equal to a liquidation preference equal to their positive
Capital Account balances, determined after taking into account all Capital
Account adjustments for the Partnership taxable year during which the
liquidation occurs, including the allocation of Net Income or Net Loss (and any
specially allocated items) computed after adjusting the Gross Asset Values of
the Partnership's assets immediately prior to any such liquidation if failure to
make such adjustment to the Gross Asset Values would have an adverse economic
impact the Series C Preferred Units (other than those made as a result of the
liquidating distribution set forth in this Section 6(a)). In the event that,
upon such voluntary or involuntary liquidation, dissolution or winding-up, there
are insufficient assets to permit full payment of liquidating distributions to
the holders of Series C Preferred Units and any Parity Preferred Units as to
rights upon liquidation, dissolution or winding-up of the Partnership, all
payments of liquidating distributions on the Series C Preferred Units and such
Parity Preferred Units shall in all cases bear to each other the same ratio that
the respective rights of the Series C Preferred Unit and such other Parity
Preferred Units (which shall not include any accumulation in respect of unpaid
distributions for prior distribution periods if such Parity Preferred Units do
not have cumulative distribution rights) upon liquidation, dissolution or
winding-up of the Partnership bear to each other.
(b) Notice. Written notice of any such voluntary or
involuntary liquidation, dissolution or winding-up of the Partnership, stating
the payment date or dates when, and the place or places where, the amounts
distributable in such circumstances shall be payable, shall be given by (i) fax
and (ii) by first class mail, postage pre-paid, not less than 30 and not 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) No Further Rights. After payment of the full amount of
the liquidating distributions to which they are entitled, the holders of Series
C Preferred Units will have no right or claim to any of the remaining assets of
the Partnership.
(d) Consolidation, Merger or Certain Other Transactions. The
voluntary sale, conveyance, lease, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all of the
property or assets of the General Partner to, or the consolidation or merger or
other business combination of the Partnership with or into, any
10
corporation, trust or other entity (or of any corporation, trust or other entity
with or into the Partnership) shall not be deemed to constitute a liquidation,
dissolution or winding-up of the Partnership.
Section 7. Optional Redemption.
(a) Right of Optional Redemption. The Series C Preferred
Units may not be redeemed prior to the fifth anniversary of the issuance date.
On or after such date, the Partnership shall have the right to redeem the Series
C Preferred Units, in whole or in part, at any time or from time to time, upon
not less than 30 nor more than 60 days' written notice, at a redemption price,
payable in cash, equal to the Capital Account balance of the holder of Series C
Preferred Units (the "Redemption Price"); provided, however, that no redemption
pursuant to this Section 7 will be permitted if such Redemption Price does not
equal or exceed the original Capital Contribution of such holder plus the
cumulative Series C Priority Return, whether or not declared, to the redemption
date to the extent not previously distributed or distributed on the redemption
date pursuant to Section 4(a). If fewer than all of the outstanding Series C
Preferred Units are to be redeemed, the Series C Preferred Units to be redeemed
shall be selected pro rata (as nearly as practicable without creating fractional
units).
(b) Limitation on Redemption.
(i) The Redemption Price of the Series C Preferred
Units (other than the portion thereof consisting of accumulated but unpaid
distributions) will be payable solely out of the sale proceeds of capital stock
of the General Partner, which will be contributed by the General Partner to the
Partnership as an additional capital contribution, or out of the sale of limited
partner interests in the Partnership and from no other source. For purposes of
the preceding sentence, "capital stock" means any equity securities (including
Common Stock and Preferred Stock (as such terms are defined in the Charter)),
shares, participation or other ownership interests (however designated) and any
rights (other than debt securities convertible into or exchangeable for equity
securities) or options to purchase any of the foregoing.
(ii) The Partnership may not redeem fewer than all of
the outstanding Series C Preferred Units unless all accumulated and unpaid
distributions have been paid on all Series C Preferred Units for all quarterly
distribution periods terminating on or prior to the date of redemption.
(c) Procedures for Redemption.
(i) Notice of redemption will be (i) faxed, and (ii)
mailed by the Partnership, by certified mail, postage prepaid, not less than 30
nor more than 60 days prior to the redemption date, addressed to the respective
holders of record of the Series C Preferred Units at their respective addresses
as they appear on the records of the Partnership. No failure to give or defect
in such notice shall affect the validity of the proceedings for the redemption
of any Series C Preferred Units except as to the holder to whom such notice was
defective or not given. In addition to any information required by law, each
such notice shall state: (i) the redemption date, (ii) the Redemption Price,
(iii) the aggregate number of Series C Preferred
11
Units to be redeemed and if fewer than all of the outstanding Series C Preferred
Units are to be redeemed, the number of Series C Preferred Units to be redeemed
held by such holder, which number shall equal such holder's pro rata share
(based on the percentage of the aggregate number of outstanding Series C
Preferred Units the total number of Series C Preferred Units held by such holder
represents) of the aggregate number of Series C Preferred Units to be redeemed,
(iv) the place or places where such Series C Preferred Units are to be
surrendered for payment of the Redemption Price, (v) that distributions on the
Series C Preferred Units to be redeemed will cease to accumulate on such
redemption date and (vi) that payment of the Redemption Price will be made upon
presentation and surrender of such Series C Preferred Units.
(ii) If the Partnership gives a notice of redemption
in respect of Series C Preferred Units (which notice will be irrevocable) then,
by 12:00 noon, New York City time, on the redemption date, the Partnership will
deposit irrevocably in trust for the benefit of the Series C Preferred Units
being redeemed funds sufficient to pay the applicable Redemption Price and will
give irrevocable instructions and authority to pay such Redemption Price to the
holders of the Series C Preferred Units upon surrender of the Series C Preferred
Units by such holders at the place designated in the notice of redemption. If
the Series C Preferred Units are evidenced by a certificate and if fewer than
all Series C Preferred Units evidenced by any certificate are being redeemed, a
new certificate shall be issued upon surrender of the certificate evidencing all
Series C Preferred Units, evidencing the unredeemed Series C Preferred Units
without cost to the holder thereof. On and after the date of redemption,
distributions will cease to accumulate on the Series C Preferred Units or
portions thereof called for redemption, unless the Partnership defaults in the
payment thereof. If any date fixed for redemption of Series C Preferred Units is
not a Business Day, then payment of the Redemption Price payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date fixed for redemption. If payment of the Redemption Price
is improperly withheld or refused and not paid by the Partnership, distributions
on such Series C Preferred Units will continue to accumulate from the original
redemption date to the date of payment, in which case the actual payment date
will be considered the date fixed for redemption for purposes of calculating the
applicable Redemption Price.
Section 8. Voting Rights.
(a) General. Holders of the Series C Preferred Units will
not have any voting rights or right to consent to any matter requiring the
consent or approval of the Limited Partners, except as otherwise expressly set
forth in the Partnership Agreement and except as set forth below.
(b) Certain Voting Rights. So long as any Series C Preferred
Units remain outstanding, the Partnership shall not, without the affirmative
vote of the holders of at least two-thirds of the Series C Preferred Units
outstanding at the time (i) authorize or create, or
12
increase the authorized or issued amount of, any class or series of Partnership
Interests ranking prior to the Series C Preferred Units with respect to payment
of distributions or rights upon liquidation, dissolution or winding-up or
reclassify any Partnership Interests of the Partnership into such Partnership
Interest, or create, authorize or issue any obligations or security convertible
into or evidencing the right to purchase any such Partnership Interest, (ii)
authorize or create, or increase the authorized or issued amount of any Parity
Preferred Units or reclassify any Partnership Interest of the Partnership into
any such Partnership Interest or create, authorize or issue any obligations or
security convertible into or evidencing the right to purchase any such
Partnership Interests but only to the extent such Parity Preferred Units are
issued to an affiliate of the Partnership, other than (A) Security Capital U.S.
Realty, Security Capital Holdings, S.A. or their affiliates or (B) the General
Partner to the extent the issuance of such interests was to allow the General
Partner to issue corresponding preferred stock to persons who are not affiliates
of the Partnership or (iii) either (A) consolidate, merge into or with, or
convey, transfer or lease its assets substantially as an entirety to, any
corporation or other entity or (B) amend, alter or repeal the provisions of the
Partnership Agreement (including without limitation this Amendment No. 2 to
Third Amended and Restated Agreement of Limited Partnership), whether by merger,
consolidation or otherwise, in each case in a manner that would materially and
adversely affect the powers, special rights, preferences, privileges or voting
power of the Series C Preferred Units or the holders thereof; provided, however,
that with respect to the occurrence of a merger consolidation or a sale or lease
of all of the Partnership's assets as an entirety, so long as (a) the
Partnership is the surviving entity and the Series C Preferred Units remain
outstanding with the terms thereof unchanged, or (b) the resulting, surviving or
transferee entity is a partnership, limited liability company or other
pass-through entity organized under the laws of any state and substitutes the
Series C Preferred Units for other interests in such entity having substantially
the same terms and rights as the Series C Preferred Units, including with
respect to distributions, redemptions, transfers, voting rights and rights upon
liquidation, dissolution or winding-up, then the occurrence of any such event
shall not be deemed to materially and adversely affect such rights, privileges
or voting powers of the holders of the Series C Preferred Units and no vote of
the Series C Preferred Units shall be required in such case; and provided
further than any increase in the amount of Partnership Interests or the creation
or issuance of any other class or series of Partnership Interests, in each case
ranking (a) junior to the Series C Preferred Units with respect to payment of
distributions and the distribution of assets upon liquidation, dissolution or
winding-up, or (b) on a parity to the Series C Preferred Units with respect to
payment of distributions and the distribution of assets upon liquidation,
dissolution or winding-up to the extent such Partnership Interests are not
issued to an affiliate of the Partnership, other than (A) Security Capital U.S.
Realty, Security Capital Holdings, S.A. or their affiliates or (B) the General
Partner to the extent the issuance of such interests was to allow the General
Partner to issue corresponding preferred stock to persons who are not affiliates
of the Partnership, shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers and no vote of the Series C
Preferred Units shall be required in such case.
13
Section 9. Transfer Restrictions.
(a) The Series C Preferred Units shall be subject to the
provisions of Article 11 of the Partnership Agreement.
(b) No transfer of the Series C Preferred Units may be made
without the consent of the General Partner, which consent may be given or
withheld in its sole and absolute discretion, if such transfer would result in
more than four partners holding all outstanding Series C Preferred Units within
the meaning of Treasury Regulation Section 1.7704-1(h)(1)(ii) (without regard to
Treasury Regulation Section 1.7704-1(h)(3)(ii)); provided, however, that the
General Partner's consent may not be unreasonably withheld if (a) such transfer
would not result in more than four (4) partners holding all outstanding Series C
Preferred Units within the meaning of such Treasury Regulation Sections or (b)
the General Partner is relying on a provision other than Treasury Regulation
Section 1.7704-1(h) to avoid classification of Operating Partnership as a PTP.
In addition, no transfer may be made to any person if such transfer would cause
the exchange of the Series C Preferred Units for Series C Preferred Shares, as
provided herein, to be required to be registered under the Securities Act, or
any state securities laws.
Section 10. Exchange Rights.
(a) Right to Exchange.
(i) Series C Preferred Units will be exchangeable in
whole or in part at anytime on or after the tenth anniversary of the date of
issuance, at the option of the holders thereof, for authorized but previously
unissued shares of 9.0% Series C Cumulative Redeemable Preferred Stock of the
General Partner (the "Series C Preferred Stock") at an exchange rate of one
share of Series C Preferred Stock for one Series C Preferred Unit, subject to
adjustment as described below (the "Exchange Price"), provided that the Series C
Preferred Units will become exchangeable at any time, in whole or in part, at
the option of the holders of Series C Preferred Units for Series C Preferred
Stock if (y) at any time full distributions shall not have been timely made on
any Series C Preferred Unit with respect to six (6) prior quarterly distribution
periods, whether or not consecutive, provided, however, that a distribution in
respect of Series C Preferred Units shall be considered timely made if made
within two (2) Business Days after the applicable Preferred Unit Distribution
Payment Date if at the time of such late payment there shall not be any prior
quarterly distribution periods in respect of which full distributions were not
timely made or (z) upon receipt by a holder or holders of Series C Preferred
Units of (A) notice from the General Partner that the General Partner or a
subsidiary of the General Partner has become aware of facts that will or likely
will cause the Partnership to become a PTP and (B) an opinion rendered by an
outside nationally recognized independent counsel familiar with such matters
addressed to a holder or holders of Series C Preferred Units, that the
Partnership is or likely is, or upon the occurrence of a defined event in the
immediate future will be or likely will be, a PTP. In addition, the Series C
Preferred Units may be exchanged for Series C Preferred Stock, in whole or in
part, at the option of any holder prior to the tenth anniversary of the issuance
date and after the third anniversary thereof if such holder of a Series C
Preferred Units shall deliver to the General Partner either (i) a private ruling
letter addressed to such holder of Series C Preferred Units or
14
(ii) an opinion of independent counsel reasonably acceptable to the General
Partner based on the enactment of temporary or final Treasury Regulations or the
publication of a Revenue Ruling, in either case to the effect that an exchange
of the Series C Preferred Units at such earlier time would not cause the Series
C Preferred Units to be considered "stock and securities" within the meaning of
Section 351(e) of the Internal Revenue Code of 1986, as amended (the "Code") for
purposes of determining whether the holder of such Series C Preferred Units is
an "investment company" under Section 721(b) of the Code if an exchange is
permitted at such earlier date. Furthermore, the Series C Preferred Units may be
exchanged in whole or in part for Series C Preferred Shares at any time after
the date hereof, if both (1) the holder thereof concludes based on results or
projected results that there exists (in the reasonable judgment of the holder) a
material risk that the holder's interest in the Partnership does or will
represent more than 19.5% of the total profits or capital interests in the
Partnership (determined in accordance with Treasury Regulations Section
1.731-2(e)(4)) for a taxable year, and (2) the holder delivers to the General
Partner an opinion of nationally recognized independent counsel to the effect
that there is a material risk that the holder's interest in the Partnership does
or will represent more than 19.5% of the total profits or capital interests in
the Partnership (determined in accordance with Treasury Regulations Section
1.731(e)(4)) for a taxable year. In addition, Series C Preferred Units, if the
holder thereof so determines, may be exchanged in whole or in part for Series C
Preferred Stock at any time after the date hereof, if (1) the holder concludes
(in the reasonable judgment of the holder) that less than 90% of the gross
income of the Partnership for any taxable year will or likely will constitute
"qualifying income" within the meaning of Section 7704(d) of the Code and (2)
the holder delivers to the General Partner an opinion of nationally recognized
independent counsel to the effect that less than 90% of the gross income of the
Partnership for a taxable year will or likely will constitute "qualifying
income" within the meaning of Section 7704(d) of the Code.
(ii) Notwithstanding anything to the contrary set
forth in Section 10(a)(i), if an Exchange Notice (as defined herein) has been
delivered to the General Partner, then the General Partner may, at its option,
elect to redeem or cause the Partnership to redeem all or a portion of the
outstanding Series C Preferred Units for cash in an amount equal to the holder's
positive Capital Account balance as apportioned with respect to such redeemed
Units, determined after adjusting the holder's Capital Account for its allocable
share of the Partnership's Net Income or Net Loss (and specially allocated
items) up to the redemption date computed after adjusting the Gross Asset Values
of the Partnership's assets immediately prior to such redemption if failure to
make such adjustment to Gross Asset Values would have an adverse economic impact
the Series C Preferred Units. The General Partner may exercise its option to
redeem the Series C Preferred Units for cash pursuant to this Section 10(a)(ii)
by giving each holder of record of Series C Preferred Units notice of its
election to redeem for cash, within five (5) Business Days after receipt of the
Exchange Notice, by (i) fax, and (ii) registered mail, postage paid, at the
address of each holder as it may appear on the records of the Partnership
stating (i) the redemption date, which shall be no later than sixty (60) days
following the receipt of the Exchange Notice, (ii) the redemption price, (iii)
the place or places where the Series C Preferred Units are to be surrendered for
payment of the redemption price, (iv) that distribution on the Series C
Preferred Units will cease to accrue on such redemption
15
date; (v) that payment of the redemption price will be made upon presentation
and surrender of the Series C Preferred Units and (vi) the aggregate number of
Series C Preferred Units to be redeemed, and if fewer than all of the
outstanding Series C Preferred Units are to be redeemed, the number of Series C
Preferred Units to be redeemed held by such holder, which number shall equal
such holder's pro-rata share (based on the percentage of the aggregate number of
outstanding Series C Preferred Units the total number of Series C Preferred
Units held by such holder represents) of the aggregate number of Series C
Preferred Units being redeemed. (iii) Upon the occurrence of an event giving
rise to exchange rights pursuant to Section 10(a)(i), in the event an exchange
of all or a portion of Series C Preferred Units pursuant to Section 10(a)(i)
would violate the ownership limitation provisions of the General Partner set
forth in Article 5 of the Charter, the General Partner shall give written notice
thereof to each holder of record of Series C Preferred Units, within five (5)
Business Days following receipt of the Exchange Notice, by (i) fax, and (ii)
registered mail, postage prepaid, at the address of each such holder set forth
in the records of the Partnership. In such event, each holder of Series C
Preferred Units shall be entitled to exchange, pursuant to the provisions of
Section 10(b) a number of Series C Preferred Units which would comply with the
ownership limitation provisions of the General Partner set forth in such Article
5 of the Charter and any Series C Preferred Units not so exchanged (the "Excess
Units") shall be redeemed by the Partnership for cash in an amount equal to the
original Capital Contribution per Excess Unit, plus any accrued and unpaid
distributions thereon, whether or not declared, to the date of redemption. The
written notice of the General Partner shall state (i) the number of Excess Units
held by such holder, (ii) the redemption price of the Excess Units, (iii) the
date on which such Excess Units shall be redeemed, which date shall be no later
than sixty (60) days following the receipt of the Exchange Notice, (iv) the
place or places where such Excess Units are to be surrendered for payment of the
Redemption Price, (v) that distributions on the Excess Units will cease to
accrue on such redemption date, and (vi) that payment of the redemption price
will be made upon presentation and surrender of such Excess Units. In the event
an exchange would result in Excess Units, as a condition to such exchange, each
holder of such units agrees to provide representations and covenants reasonably
requested by the General Partner relating to (i) the widely held nature of the
interests in such holder, sufficient to assure the General Partner that the
holder's ownership of stock of the General Partner (without regard to the limits
described above) will not cause any individual to own in excess of 9.8% of the
stock of the General Partner, to the extent such holder can reasonably make such
representation; and (ii) to the extent such holder can so represent and covenant
without obtaining information from its owners, the holder's ownership of tenants
of the Partnership and its affiliates.
Notwithstanding any provision of this Agreement to the contrary, no
Series C Limited Partner shall be entitled to effect an exchange of Series C
Preferred Units for Series C Preferred Stock to the extent that ownership or
right to acquire such shares would cause the Partner or any other Person or, in
the opinion of counsel selected by the General Partner, may cause the Partner or
any other Person, to violate the restrictions on ownership and transfer of
Series C Preferred Stock set forth in the Charter. To the extent any such
attempted exchange
16
for Series C Preferred Stock would be in violation of the previous sentence, it
shall be void ab initio and such Series C Limited Partner shall not acquire any
rights or economic interest in the Series C Preferred Stock otherwise issuable
upon such exchange.
(iv) The redemption of Series C Preferred Units
described in Section 10(a)(ii) and (iii) shall be subject to the provisions of
Section 7(b)(i) and Section 7(c)(ii); provided, however, that for purposes
hereof the term "Redemption Price" in Sections 7(b)(i) and 7(c)(ii) shall be
read to mean the original Capital Contribution per Series C Preferred Unit being
redeemed plus all accrued and unpaid distributions to the redemption date.
(b) Procedure for Exchange.
(i) Any exchange shall be exercised pursuant to a
notice of exchange (the "Exchange Notice") delivered to the General Partner by
the holder who is exercising such exchange right, by (i) fax and (ii) by
certified mail postage prepaid. Upon request of the General Partner, such holder
delivering the Exchange Notice shall provide to the General Partner in writing
such information as the General Partner may reasonably request to determine
whether any portion of the exchange by the delivering holder will result in the
violation of the restrictions of Article 5 of the Charter, including the
Ownership Limit and the Related Tenant Limit. The exchange of Series C Preferred
Units, or a specified portion thereof, may be effected after the fifth (5th)
Business Day following receipt by the General Partner of the Exchange Notice and
such requested information by delivering certificates, if any, representing such
Series C Preferred Units to be exchanged together with, if applicable, written
notice of exchange and a proper assignment of such Series C Preferred Units to
the office of the General Partner maintained for such purpose. Currently, such
office is 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxx 00000. Each
exchange will be deemed to have been effected immediately prior to the close of
business on the date on which such Series C Preferred Units to be exchanged
(together with all required documentation) shall have been surrendered and
notice shall have been received by the General Partner as aforesaid and the
Exchange Price shall have been paid. Any Series C Preferred Shares issued
pursuant to this Section 10 shall be delivered as shares which are duly
authorized, validly issued, fully paid and nonassessable, free of pledge, lien,
encumbrance or restriction other than those provided in the Charter, the Bylaws
of the General Partner, the Securities Act and relevant state securities or blue
sky laws.
(ii) In the event of an exchange of Series C
Preferred Units for shares of Series C Preferred Stock, an amount equal to the
accrued and unpaid distributions which are not paid pursuant to Section 4(a)
hereof, whether or not declared, to the date of exchange on any Series C
Preferred Units tendered for exchange shall (i) accrue and be payable by the
General Partner from and after the date of exchange on the shares of the Series
C Preferred Stock into which such Series C Preferred Units are exchanged, and
(ii) continue to accrue on such Series C Preferred Units, which shall remain
outstanding following such exchange, with the General Partner as the holder of
such Series C Preferred Units. Notwithstanding anything to the contrary set
forth herein, in no event shall a holder of a Series C Preferred Unit that was
17
validly exchanged into Series C Preferred Stock pursuant to this section (other
than the General Partner now holding such Series C Preferred Unit), receive a
distribution out of Available Cash or Capital Transaction Proceeds of the
Partnership with respect to any Series C Preferred Units so exchanged.
(iii) Fractional shares of Series C Preferred Stock
are not to be issued upon exchange but, in lieu thereof, the General Partner
will pay a cash adjustment based upon the fair market value of the Series C
Preferred Stock on the day prior to the exchange date as determined in good
faith by the Board of Directors of the General Partner.
(c) Adjustment of Series C Exchange Price. In case the
General Partner shall be a party to any transaction (including, without
limitation, a merger, consolidation, statutory share exchange, tender offer for
all or substantially all of the General Partner's capital stock or sale of all
or substantially all of the General Partner's assets), in each case as a result
of which the Series C Preferred Stock will be converted into the right to
receive shares of capital stock, other securities or other property (including
cash or any combination thereof), each Series C Preferred Unit will thereafter
be exchangeable into the kind and amount of shares of capital stock and other
securities and property receivable (including cash or any combination thereof)
upon the consummation of such transaction by a holder of that number of Series C
Preferred Stock or fraction thereof into which one Series C Preferred Unit was
exchangeable immediately prior to such transaction. The General Partner may not
become a party to any such transaction unless the terms thereof are consistent
with the foregoing.
Section 11. No Conversion Rights. The holders of the Series C
Preferred Units shall not have any rights to convert such Partnership Units into
any other class of Partnership Interests or any other interest in the
Partnership.
Section 12. No Sinking Fund. No sinking fund shall be established
for the retirement or redemption of the Series C Preferred Units.
Section 13. Miscellaneous.
(a) The terms "Original Limited Partnership Units," "Class B
Units," "Class 2 Units," "Class Z Branch Partners," "Class Z Midland Partners,"
"Additional Limited Partners," "Common Units," "General Partner Units" and
"Percentage Interest" in the Partnership Agreement shall not be deemed to
include the Series C Preferred Units. The terms "Limited Partnership Interest"
and "Partnership Interest" shall be deemed to include the Series C Preferred
Units.
(b) Exhibit A to the Partnership Agreement is hereby amended
to include the Series C Preferred Units as Limited Partnership Interests.
(c) Section 7.1(h) of the Partnership Agreement is hereby
amended to include the Series C Priority Return Amount.
18
(d) Nothing contained in Section 8.4 or the last sentence of
Section 13.6 of the Partnership Agreement shall be deemed to limit the issuance
of, and provisions applicable to, the Series C Preferred Units.
(e) Notwithstanding anything to the contrary contained in
Section 8.6 of the Partnership Agreement, in no event shall the rights of the
holders of the Series C Preferred Units set forth in Section 10 of this
Agreement be subordinate to the Redemption Rights set forth in Section 8.6 of
the Partnership Agreement.
(f) All references to Section 4.5(f) and Section 4.5(f)(ii)
shall be deemed to include a reference to Section 8 and Section 8(b) hereof,
respectively.
(g) Simultaneously with the effectiveness of the Fourth
Amended Agreement, this Amendment No. 2 to the Partnership Agreement shall be
deemed Amendment No. 2 to the Fourth Amended Agreement, mutatis mutandis, and
the Series C Preferred Units shall continue to be outstanding upon the terms and
conditions set forth herein.
(h) This Amendment may be executed in one or more
counterparts, all of which shall constitute one and the same agreement.
19
GENERAL PARTNER
Regency Realty Corporation
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxx
Its Managing Director and Executive
Vice President
CONTRIBUTOR
XXXXXXX XXXXX 0000 XXXXXXXX XXXXX FUND,
L.P.
By: Xxxxxxx Sachs Management Partners,
L.P., as its general partner
By: Xxxxxxx Xxxxx Management, Inc., as
its general partner
By: /s/ Xxxxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxxxx X. Xxxxxx
Title: Vice President
SECURITY CAPITAL U.S. REALTY
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
SECURITY CAPITAL HOLDINGS S.A.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
ARDEN SQUARE HOLDINGS SARL
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Sarl Manager
BLOSSOM VALLEY HOLDINGS SARL
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Sarl Manager
XXXXXX STREET PLAZA HOLDINGS SARL
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Sarl Manager
DALLAS HOLDINGS SARL
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Sarl Manager
EL CAMINO HOLDINGS SARL
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Sarl Manager
FRIARS MISSION HOLDINGS SARL
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Sarl Manager
Amendment No. 1 to Third Amended and Restated Agreement of
Limited Partnership (the "Partnership Agreement")
Relating to 8.75% Series B Cumulative Redeemable Preferred Units
Section 1. Definitions. Capitalized terms used and not otherwise
defined herein shall have the meaning assigned thereto in the Partnership
Agreement. For purposes of this Amendment, the term "Series B Limited Partner"
means a Limited Partner holding Series B Preferred Units. The term "Parity
Preferred Units" shall be used to refer to Series A Preferred Units, Series B
Preferred Units (as hereafter defined) and any class or series of Partnership
Interests of the Partnership now or hereafter authorized, issued or outstanding
expressly designated by the Partnership to rank on a parity with Series A
Preferred Units or Series B Preferred Units with respect to distributions or
rights upon voluntary or involuntary liquidation, winding-up or dissolution of
the Partnership, or both, as the context may require, whether or not the
dividend rates, dividend payment dates or redemption or liquidation prices per
unit or conversion rights or exchange rights shall be different from those of
the Series A Preferred Units. The term "Series B Priority Return" shall mean, an
amount equal to 8.75% per annum, determined on the basis of a 360 day year of
twelve 30 day months (or actual days for any month which is shorter than a full
monthly period), cumulative to the extent not distributed for any given
distribution period, of the stated value of $100 per Series B Preferred Unit,
commencing on the date of issuance of such Series B Preferred Unit. The
Partnership Agreement shall be amended to add such definitions, and shall be
further amended to add the following definition: "Priority Returns" means the
Series A Priority Return and the Series B Priority Return or similar amount
payable with respect to any other Parity Preferred Units. The term "Junior
Stock" means any class or series of capital stock of the General Partner ranking
junior as to the payment of distributions or rights upon voluntary or
involuntary liquidation, winding up or dissolution of the General Partner to the
Series B Preferred Stock. The term "PTP" shall mean a "publicly traded
partnership" within the meaning of Section 7704 of the Code (as hereafter
defined). The final Paragraph in the definition of "Net Income" and "Net Loss"
in the Partnership Agreement shall be restated in its entirety as follows:
"Solely for purposes of allocating Net Income or Net Loss in
any Fiscal Year to the holders of the Parity Preferred Units,
items of Net Income and Net Loss, as the case may be, shall
not include Depreciation with respect to properties (or
groupings of properties selected by the General Partner using
any method determined by it to be reasonable) that are
"ceiling limited" in respect of the holders of the Parity
Preferred Units. For purposes of the preceding sentence,
Partnership property shall be considered ceiling limited in
respect of a holder of Parity Preferred Units if Depreciation
attributable to such Partnership property which would
otherwise be allocable to such Partner, without regard to this
paragraph, exceeded depreciation determined for federal income
tax purposes attributable to such
Partnership property which would otherwise be allocated to such
Partner by more than 5%."
Section 2. Designation and Number. A series of Partnership Units in
the Partnership designated as the "8.75% Series B Cumulative Redeemable
Preferred Units" (the "Series B Preferred Units") is hereby established. The
number of Series B Preferred Units shall be 850,000.
Section 3. Rank.
(a) The Series B Preferred Units will, with respect to
distributions or rights upon voluntary or involuntary liquidation, winding-up or
dissolution of the Partnership, or both, rank senior to all classes or series of
Partnership Interests now or hereafter authorized, issued or outstanding other
than any class or series of equity securities of the Partnership issued after
the issuance of the Series B Preferred Units and expressly designated in
accordance with the Partnership Agreement as ranking on a parity with the Series
B Preferred Units as to distributions or rights upon voluntary or involuntary
liquidation, winding-up or dissolution of the Partnership, or both. The Series B
Preferred Units are expressly designated as ranking on a parity with the Series
A Preferred Units.
(b) The last sentence of Section 4.1(a) of the Partnership
Agreement shall be amended to read in full as follows (new language is
underscored):
Any Partnership Interests held by the General Partner or any
Affiliate other than a Property Affiliate (including
Partnership Interests acquired under Sections 4.2, 8.6 and
8.7) shall be Class B Units, other than Parity Preferred
Units, the issuance of which has been approved by the Limited
Partners pursuant to Section 4.2, and any Preferred Units
issued pursuant to Section 4.2(b)(i).
Section 4. Distributions.
(a) Payment of Distributions. Subject to the rights of
holders of Parity Preferred Units, holders of Series B Preferred Units shall be
entitled to receive, when, as and if declared by the Partnership acting through
the General Partner, out of Available Cash and Capital Transaction Proceeds,
cumulative preferential cash distributions at the rate per annum of 8.75% of the
original Capital Contribution per Series B Preferred Unit (the "Original Coupon
Rate"; as it may be adjusted from time to time, the "Coupon Rate"). If (i) on or
prior to January 31, 2000, the Partnership or the General Partner consummates a
merger or consolidation (the "Merger") with another entity (the "Merger
Partner") having an equity market capitalization in excess of $1 billion, and
(ii) after the date of consummation of the Merger and on or before the later of
the 180th day following the first public announcement of the proposed Merger and
the 90th day following the consummation of the Merger (the "Adjustment Period"),
either Xxxxx'x or Standard & Poor's (each a "Rating Agency") changes (a "Rating
Change") its unconditional, published rating of the General Partner's preferred
stock (such Agency's "GP Rating"), then, from and after the date of each such
2
Rating Change by either such Rating Agency during the Adjustment Period, the
Coupon Rate shall be adjusted to equal an amount determined by decreasing (if
the product described below is a positive number) or increasing (if the product
described below is a negative number) the Original Coupon Rate by the product of
(A) the positive number of grade levels of such Rating Agency by which its new
GP Rating exceeds, or the negative number of grade levels of such Rating Agency
by which its new GP Rating is less than, its GP Rating as of September 3, 1999,
multiplied by (B) 12.5 basis points. In the case of each such Rating Change, the
designation of the Series B Preferred Units will change accordingly to reflect
such new Coupon Rate. Promptly after the expiration of the Adjustment Period,
the parties hereto shall execute, acknowledge and deliver or cause to be
executed, acknowledged and delivered all instruments and documents as may be
reasonably necessary or desirable to memorialize the revised Coupon Rate,
including making a corresponding change to the Series B Priority Return. Such
distributions shall be cumulative, shall accrue from the original date of
issuance and will be payable (A) quarterly in arrears, on or before March 1,
June 1, September 1 and December 1 of each year commencing on December 1, 1999
and (B) in the event of (i) an exchange of Series B Preferred Units into Series
B Preferred Stock, or (ii) a redemption of Series B Preferred Units, on the
exchange date or redemption date, as applicable (each a "Series B Preferred Unit
Distribution Payment Date"). The amount of the distribution payable for any
period will be computed on the basis of a 360-day year of twelve 30-day months
and for any period shorter than a full quarterly period for which distributions
are computed, the amounts of the distribution payable will be computed based on
the ratio of the actual number of days elapsed in period to ninety (90) days. If
any date on which distributions are to be made on the Series B Preferred Units
is not a Business Day (as defined herein), then payment of the distribution to
be made on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay)
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date. Distributions on
December 31, 1999 and thereafter on the Series B Preferred Units will be made to
the holders of record of the Series B Preferred Units on the relevant record
dates to be fixed by the Partnership acting through the General Partner, which
record dates shall be not less than ten (10) days and not more than thirty (30)
Business Days prior to the relevant Preferred Unit Distribution Payment Date
(the "Series B Preferred Unit Partnership Record Date").
The term "Business Day" shall mean each day, other than a Saturday or a
Sunday, which is not a day on which banking institutions in New York, New York
are authorized or required by law, regulation or executive order to close.
(b) Distributions Cumulative. Distributions on the Series B
Preferred Units will accrue whether or not the terms and provisions of any
agreement of the Partnership, including any agreement relating to its
indebtedness, at any time prohibit the current payment of distributions, whether
or not the Partnership has earnings, whether or not there are funds legally
available for the payment of such distributions and whether or not such
distributions are authorized. Accrued but unpaid distributions on the Series B
Preferred Units will accumulate as of the Series B Preferred Unit Distribution
Payment Date on which they first become
3
payable. Distributions on account of arrears for any past distribution periods
may be declared and paid at any time, without reference to a regular Series B
Preferred Unit Distribution Payment Date to holders of records of the Series B
Preferred Units on the record date fixed by the Partnership acting through the
General Partner which date shall be not less than ten (10) days and not more
than thirty (30) Business Days prior to the payment date. Accumulated and unpaid
distributions will not bear interest.
(c) Priority as to Distributions.
(i) So long as any Series B Preferred Units are
outstanding, no distribution of cash or other property shall be authorized,
declared, paid or set apart for payment on or with respect to any class or
series of Partnership Interests of the Partnership ranking junior as to the
payment of distributions to Parity Preferred Units (collectively, "Junior
Units"), nor shall any cash or other property be set aside for or applied to the
purchase, redemption or other acquisition for consideration of any Series B
Preferred Units, any Parity Preferred Units with respect to distributions or any
Junior Units, unless, in each case, all distributions accumulated on all Series
B Preferred Units and all classes and series of outstanding Parity Preferred
Units as to payment of distributions have been paid in full. The foregoing
sentence will not prohibit (a) distributions payable solely in Junior Units, (b)
the conversion of Junior Units or Parity Preferred Units into Partnership
Interests of the Partnership ranking junior to the Series B Preferred Units as
to distributions, or (c) the redemption of Partnership Interests corresponding
to any Series B Preferred Stock, Parity Preferred Stock with respect to
distributions or Junior Stock to be purchased by the General Partner pursuant to
Article 5 of the Articles of Incorporation of the General Partner (the
"Charter") to preserve the General Partner's status as a real estate investment
trust, provided that such redemption shall be upon the same terms as the
corresponding purchase pursuant to Article 5 of the Charter.
(ii) So long as distributions have not been paid in
full (or a sum sufficient for such full payment is not irrevocably deposited in
trust for payment) upon the Series B Preferred Units, all distributions
authorized and declared on the Series B Preferred Units and all classes or
series of outstanding Parity Preferred Units with respect to distributions shall
be authorized and declared so that the amount of distributions authorized and
declared per Series B Preferred Unit and such other classes or series of Parity
Preferred Units shall in all cases bear to each other the same ratio that
accrued distributions per Series B Preferred Unit and such other classes or
series of Parity Preferred Units (which shall not include any accumulation in
respect of unpaid distributions for prior distribution periods if such classes
or series of Parity Preferred Units do not have cumulative distribution rights)
bear to each other.
(d) No Further Rights. Holders of Series B Preferred Units
shall not be entitled to any distributions, whether payable in cash, other
property or otherwise, in excess of the full cumulative distributions described
herein.
4
(e) Section 5.1(c) of the Partnership Agreement shall be
amended to read in full as follows (new language is underscored):
"Anything herein to the contrary notwithstanding, subject to
Section 4(c)(i) of Amendment No. 1 to this Agreement, no
Available Cash or Capital Transaction Proceeds shall be
distributed pursuant to Section 5.1(a), Section 5.1(b) or any
other provisions of this Article 5 unless all distributions
accumulated on all Series A Preferred Units pursuant to
Section 4.5 have been paid in full and unless all
distributions accumulated on any other outstanding Preferred
units have been paid in full."
Section 5. Allocations.
(a) Section 6.1(a) and 6.1(b) of the Agreement are hereby
deleted and the following inserted as new Sections 6.1(a) and 6.1(b) in lieu
thereof (new language is underscored):
Section 6.1 Allocations of Net Income and Net Loss. For
purposes of maintaining the Capital Accounts and in determining the
rights of the Partners among themselves, the Partnership's Net Income
and Net Loss shall be allocated among the Partners for each taxable
year (or portion thereof) as provided herein below.
(a) Net Income. After giving effect to the special
allocations set forth in Section 6.2 below, Net Income shall
be allocated as follows (and for this purpose, the holders of
Class A Units shall be treated as if they were Original
Limited Partners):
(i) First, one hundred percent (100%) to the
General Partner in an amount equal to the excess, if
any, of (A) the cumulative Net Losses allocated to
the General Partner pursuant to Section 6.1(b)(ix)
and the last sentence of Section 6.1(b) for all prior
fiscal years, over (B) the cumulative Net Income
allocated pursuant to this Section 6.1(a)(i) for all
prior fiscal years;
(ii) Second, one hundred percent (100%) to
the holders of Parity Preferred Units in an amount
equal to the excess, if any, of (A) the cumulative
Net Losses allocated to the holders of Parity
Preferred Units pursuant to Section 6.1(b)(viii) for
all prior fiscal years, over (B) the cumulative Net
Income allocated pursuant to this Section 6.1(a)(ii),
including any amounts allocated pursuant to Section
6.2(g) which were attributable to this Section
6.1(a)(ii), for all prior fiscal years;
(iii) Third, one hundred percent (100%) to
the Original Limited Partners in an amount equal to
the excess, if any, of (A) the cumulative Net Losses
allocated to such Partners pursuant to Section
5
6.1(b)(iv) for all prior fiscal years, over (B) the
cumulative Net Income allocated pursuant to this
Section 6.1(a)(iii) for all prior fiscal years, which
amount shall be allocated among such Partners in the
same proportions and in the reverse order as the Net
Losses were allocated pursuant to Section 6.1(b)(iv);
(iv) Fourth, one hundred percent (100%) to
the Original Limited Partners in an amount equal to
the excess, if any, of (A) the cumulative Net Losses
allocated to such Partners pursuant to Section
6.1(b)(iii) for all prior fiscal years, over (B) the
cumulative Net Income allocated pursuant to this
Section 6.1(a)(iv) for all prior fiscal years, which
amount shall be allocated among such Partners in the
same proportions and in the reverse order as the Net
Losses were allocated pursuant to Section
6.1(b)(iii);
(v) Fifth, one hundred percent (100%) to the
holders of Parity Preferred Units until the holders
of Parity Preferred Units have been allocated an
amount equal to the excess of their respective
cumulative Priority Returns through the last day of
the current fiscal year (determined without reduction
for distributions made to date in satisfaction
thereof) over the cumulative Net Income allocated to
the holders of Parity Preferred Units pursuant to
this Section 6.1(a)(v), including any amounts
allocated pursuant to Section 6.2(g) which were
attributable to this Section 6.1(a)(v), for all prior
periods;
(vi) Sixth, one hundred percent (100%) to
the Original Limited Partners until the cumulative
allocations of Net Income to each Original Limited
Partner under this Section 6.1(a)(vi) for the current
and all prior fiscal years equal the cumulative
distributions paid to the Original Limited Partner
pursuant to Section 5.1(a)(i) and Section 13.2(a)(iv)
, provided, however, in the case of Original Limited
Partners other than Class Z Branch Partners, no
allocations of Net Income shall be made under this
Section 6.1(a)(vi) to such Limited Partners with
respect to distributions made under Section 5.1(a)(i)
and Section 13.2(a)(iv) after the Third Amendment
Date;.
(vii) Seventh, one hundred percent (100%) to
the Original Limited Partners until the cumulative
allocations of Net Income to each Original Limited
Partner under this Section 6.1(a)(vii) for the
current and all prior fiscal years equal the sum of
the cumulative amounts credited to such Partner's
Cumulative Unpaid Priority Distribution Account and
Cumulative Unpaid Accrued Return Account for the
current and all prior fiscal years, provided,
however, in the case of Original Limited Partners
other than Class Z Branch Partners, no allocations of
Net Income shall be made under this Section
6.1(a)(vii) with respect to
6
amounts credited to such Partners' Cumulative Unpaid
Priority Distribution Accounts and Cumulative Unpaid
Accrued Return Accounts after the Third Amendment Date;
(viii) Eighth, one hundred percent (100%) to
the Additional Limited Partners in an amount equal to
the excess, if any, of (A) the cumulative Net Losses
allocated to the Additional Limited Partners pursuant
to Section 6.1(b)(vii) for all prior fiscal years,
over (B) the cumulative Net Income allocated pursuant
to this Section 6.1(a)(viii) for all prior fiscal
years, which amount shall be allocated among the
Additional Limited Partners in the same proportions
and in the reverse order as the Net Losses were
allocated pursuant to Section 6.1(b)(vii);
(ix) Ninth, one hundred percent (100%) to
the Additional Limited Partners in an amount equal to
the excess, if any of (A) the cumulative Net Losses
allocated to the Additional Limited Partners pursuant
to Section 6.1(b)(vi) for all prior fiscal years,
over (B) the cumulative Net Income allocated pursuant
to this Section 6.1(a)(ix) for all prior fiscal
years, which amount shall be allocated among such
Partners in the same proportions and in the reverse
order as the Net Losses were allocated pursuant to
Section 6.1(b)(vi);
(x) Tenth, one hundred percent (100%) to the
Additional Limited Partners until the cumulative
allocations of Net Income to each Additional Limited
Partner under this Section 6.1(a)(x) for the current
and all prior fiscal years equal the cumulative
distributions paid to the Additional Limited Partners
pursuant to Section 5.1(a)(iv) and Section
13.2(a)(v), provided, however, in the case of
Additional Limited Partners other than Class Z
Midland Partners, no allocations of Net Income shall
be made under this Section 6.1(a)(x) to such Limited
Partners with respect to distributions made under
Section 5.1(a)(iv) and Section 13.2(a)(v) after the
Third Amendment Date;
(xi) Eleventh, one hundred percent (100%) to
the Additional Limited Partners until the cumulative
allocations of Net Income to each Additional Limited
Partner under this Section 6.1(a)(xi) for the current
and all prior fiscal years equal the sum of (A) the
cumulative amounts credited to such Partner's
Cumulative Unpaid Priority Distribution Account and
Cumulative Unpaid Accrued Return Account for the
current and all prior fiscal years and (B) the
cumulative Net Losses allocated to the Additional
Limited Partner pursuant to Section 6.1(b)(v) for all
prior fiscal years, provided, however, in the case of
Additional Limited Partners other than Class Z
Midland Partners, no allocation of Net Income shall
be made under this Section 6.1(a)(xi) with respect to
amounts credited to such Partners' Cumulative Unpaid
Priority
7
Distribution Accounts and Cumulative Unpaid Accrued
Return Accounts after the Third Amendment Date; and
(xii) Thereafter, to the Original and
Additional Limited Partners other than Class Z Branch
Partners or Class Z Midland Partners, to the General
Partner and to any other holders of Class B Units,
pro rata in accordance with the relative amounts of
Available Cash and Capital Transaction Proceeds
distributed to each of them during the taxable year.
(b) Net Losses. After giving effect to the special
allocations set forth in Section 6.2 below, Net Losses shall
be allocated as follows:
(i) First, one hundred percent (100%) to the
Original and Additional Limited Partners other than
Class Z Branch Partners or Class Z Midland Partners,
to the General Partner and the Class B Unit holders
in an amount equal to the excess, if any, of (A) the
cumulative Net Income allocated pursuant to Section
6.1(a)(xii) hereof for all prior fiscal years in
excess of distributions of Available Cash to such
Partners for which no corresponding allocation of Net
Income had been made (or is required to be made)
under Sections 6.1(a)(i)-(xi) hereof, over (B) the
cumulative Net Losses allocated pursuant to this
Section 6.1(b)(i) for all prior fiscal years;
(ii) Second, to the Original Limited
Partners until the cumulative allocations of Net
Losses under this Section 6.1(b)(ii) equal the
excess, if any, of the cumulative allocations of Net
Income under Section 6.1(a)(vii) to such Partners for
all prior fiscal years over the cumulative
distributions to such Partners under Section
5.1(a)(ii) and (iii) and Section 5.1(b)(i) and (ii)
for the current and all prior fiscal years (such
allocation being made in proportion to such Partners'
respective excess amounts);
(iii) Third, to the Original Limited
Partners with positive Adjusted Capital Account
balances (determined, solely for purposes of this
Section 6.1(b)(iii), without regard to any obligation
of a Partner to restore a negative Capital Account
under Section 13.4), in proportion to such balances,
until such balances are reduced to zero;
(iv) Fourth, to the Original Limited
Partners in proportion to their relative Percentage
Interests; provided, however, that to the extent that
an allocation under this Section 6.1(b)(iv) would
cause or increase an Adjusted Capital Account Deficit
for such Partner, such Net Loss shall be allocated to
those Original Limited Partners (in proportion to
their relative Percentage Interests) for whom such
allocation would not cause or increase an Adjusted
Capital Account Deficit;
8
(v) Fifth, to the Additional Limited
Partners until the cumulative allocations of Net
Losses under this Section 6.1(b)(v) equal the excess,
if any, of the cumulative allocations of Net Income
under Section 6.1(a)(xi) to such Partners for all
prior fiscal years over the cumulative distributions
to such Partners under Section 5.1(a)(v) and (vi) and
Section 5.1(b)(iii) and (iv) for the current and all
prior fiscal years (such allocation being made in
proportion to such Partners' respective excess
amounts);
(vi) Sixth, to the Additional Limited
Partners with positive Adjusted Capital Accounts
balances (determined, solely for purposes of this
Section 6.1(b)(vi), without regard to any obligation
of a Partner to restore a negative Capital Account
under Section 13.4), in proportion to such balances,
until such balances are reduced to zero;
(vii) Seventh, to the Additional Limited
Partners in proportion to their relative Percentage
Interests; provided, however, that to the extent that
an allocation under this Section 6.1(b)(vii) would
cause or increase an Adjusted Capital Account Deficit
for such Partner, such Net Loss shall be allocated to
those Additional Limited Partners (in proportion to
their relative Percentage Interests) for whom such
allocation would not cause or increase an Adjusted
Capital Account Deficit;
(viii) Eighth, to the holders of Parity
Preferred Units until their respective Adjusted
Capital Account Balance (determined, solely for
purposes of this Section 6.1(b)(viii), without regard
to any obligation of a Partner to restore a negative
Capital Account under Section 13.4), has been reduced
to zero; and
(ix) Any remaining Net Loss shall be
allocated to the General Partner and any other
holders of Class B Units.
Notwithstanding the foregoing, Net Losses shall not be allocated to any
Limited Partner pursuant to this Section 6.1(b)(ix) to the extent that
such allocation would cause such Limited Partner to have an Adjusted
Capital Account Deficit at the end of such taxable year (or increase
any existing Adjusted Capital Account Deficit). All Net Losses in
excess of the limitations set forth in the preceding sentence of this
Section 6.1(b) shall be allocated to the General Partner.
(b) Section 6.2(g) of the Agreement is hereby deleted and
the following inserted as new Section 6.2(g) in lieu thereof (new language is
underscored):
(g) Capital Account Adjustments. Notwithstanding
anything herein to the contrary other than the last sentence
of Section 14.1(g), any gain or loss arising from an
adjustment to the Gross Asset Value of any Partnership asset
9
pursuant to clause (b) or (c) of the definition thereof shall
be allocated (i) first, to the holders of the Parity Preferred
Units, but only to the extent that they would have been
allocated such gain pursuant to Section 6.1(a)(ii) or Section
6.1(a)(v) of this Agreement or such loss pursuant to Section
6.1(b)(viii) of this Agreement, as applicable, if such gain or
loss had been actually realized; and (ii) second, and subject
to section 6.2(h) hereof, one hundred percent (100%) of the
remainder of such gain or loss to the General Partner and the
Additional Limited Partners (other than holders of Parity
Preferred Units) pro rata in accordance with the relative
number of Units held by each; provided, however, that for this
purpose, the General Partner shall be treated as owning all of
the outstanding Class A Units and all of the outstanding
Original Limited Partnership Units in addition to the actual
number of Units which the General Partner holds. An Additional
Limited Partner (except for holders of Parity Preferred
Units), at the time of admission to the Partnership, may elect
with the consent of the General Partner to not receive special
allocations of any gain or loss resulting from such
adjustments.
Section 6. Liquidation Preference.
(a) Payment of Liquidating Distributions. Subject to the
rights of holders of Parity Preferred Units with respect to rights upon any
voluntary or involuntary liquidation, dissolution or winding-up of the
Partnership the holders of Series B Preferred Units shall be entitled to receive
out of the assets of the Partnership legally available for distribution or the
proceeds thereof, after payment or provision for debts and other liabilities of
the Partnership, but before any payment or distributions of the assets shall be
made to holders of any class or series of Partnership Interest that ranks junior
to the Series B Preferred Units as to rights upon liquidation, dissolution or
winding-up of the Partnership, an amount equal to the sum of (i) a liquidation
preference equal to their positive Capital Account balances, determined after
taking into account all Capital Account adjustments for the Partnership taxable
year during which the liquidation occurs (other than those made as a result of
the liquidating distribution set forth in this Section 6(a)), and (ii) an amount
equal to any accumulated and unpaid distributions thereon, whether or not
declared, to the date of payment. In the event that, upon such voluntary or
involuntary liquidation, dissolution or winding-up, there are insufficient
assets to permit full payment of liquidating distributions to the holders of
Series B Preferred Stock and any Parity Preferred Units as to rights upon
liquidation, dissolution or winding-up of the Partnership, all payments of
liquidating distributions on the Series B Preferred Units and such Parity
Preferred Units shall in all cases bear to each other the same ratio that the
respective rights of the Series B Preferred Unit and such other Parity Preferred
Units (which shall not include any accumulation in respect of unpaid
distributions for prior distribution periods if such Parity Preferred Units do
not have cumulative distribution rights) upon liquidation, dissolution or
winding-up of the Partnership bear to each other.
(b) Notice. Written notice of any such voluntary or
involuntary liquidation, dissolution or winding-up of the Partnership, stating
the payment date or dates when, and the place or places where, the amounts
distributable in such circumstances shall be payable, shall
10
be given by (i) fax and (ii) by first class mail, postage pre-paid, not less
than 30 and not more than 60 days prior to the payment date stated therein, to
each record holder of the Series B Preferred Units at the respective addresses
of such holders as the same shall appear on the transfer records of the
Partnership.
(c) No Further Rights. After payment of the full amount of
the liquidating distributions to which they are entitled, the holders of Series
B Preferred Units will have no right or claim to any of the remaining assets of
the Partnership.
(d) Consolidation, Merger or Certain Other Transactions. The
voluntary sale, conveyance, lease, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all of the
property or assets of the General Partner to, or the consolidation or merger or
other business combination of the Partnership with or into, any corporation,
trust or other entity (or of any corporation, trust or other entity with or into
the Partnership) shall not be deemed to constitute a liquidation, dissolution or
winding-up of the Partnership.
Section 7. Optional Redemption.
(a) Right of Optional Redemption. The Series B Preferred
Units may not be redeemed prior to the fifth anniversary of the issuance date.
On or after such date, the Partnership shall have the right to redeem the Series
B Preferred Units, in whole or in part, at any time or from time to time, upon
not less than 30 nor more than 60 days' written notice, at a redemption price,
payable in cash, equal to the Capital Account balance of the holder of Series B
Preferred Units (the "Redemption Price"); provided, however, that no redemption
pursuant to this Section 7 will be permitted if the Redemption Price does not
equal or exceed the original Capital Contribution of such holder plus the
cumulative Series B Priority Return, whether or not declared, to the redemption
date to the extent not previously distributed or distributed on the redemption
date pursuant to Section 4(a). If fewer than all of the outstanding Series B
Preferred Units are to be redeemed, the Series B Preferred Units to be redeemed
shall be selected pro rata (as nearly as practicable without creating fractional
units).
(b) Limitation on Redemption.
(i) The Redemption Price of the Series B Preferred
Units (other than the portion thereof consisting of accumulated but unpaid
distributions) will be payable solely out of the sale proceeds of capital stock
of the General Partner, which will be contributed by the General Partner to the
Partnership as additional capital contribution, or out of the sale of limited
partner interests in the Partnership and from no other source. For purposes of
the preceding sentence, "capital stock" means any equity securities (including
Common Stock and Preferred Stock (as such terms are defined in the Charter)),
shares, participation or other ownership interests (however designated) and any
rights (other than debt securities convertible into or exchangeable for equity
securities) or options to purchase any of the foregoing.
(ii) The Partnership may not redeem fewer than all of
the outstanding Series B Preferred Units unless all accumulated and unpaid
distributions have been paid on all
11
Series B Preferred Units for all quarterly distribution periods terminating on
or prior to the date of redemption.
(c) Procedures for Redemption.
(i) Notice of redemption will be (i) faxed, and (ii)
mailed by the Partnership, by certified mail, postage prepaid, not less than 30
nor more than 60 days prior to the redemption date, addressed to the respective
holders of record of the Series B Preferred Units at their respective addresses
as they appear on the records of the Partnership. No failure to give or defect
in such notice shall affect the validity of the proceedings for the redemption
of any Series B Preferred Units except as to the holder to whom such notice was
defective or not given. In addition to any information required by law, each
such notice shall state: (i) the redemption date, (ii) the Redemption Price,
(iii) the aggregate number of Series B Preferred Units to be redeemed and if
fewer than all of the outstanding Series B Preferred Units are to be redeemed,
the number of Series B Preferred Units to be redeemed held by such holder, which
number shall equal such holder's pro rata share (based on the percentage of the
aggregate number of outstanding Series B Preferred Units the total number of
Series B Preferred Units held by such holder represents) of the aggregate number
of Series B Preferred Units to be redeemed, (iv) the place or places where such
Series B Preferred Units are to be surrendered for payment of the Redemption
Price, (v) that distributions on the Series B Preferred Units to be redeemed
will cease to accumulate on such redemption date and (vi) that payment of the
Redemption Price will be made upon presentation and surrender of such Series B
Preferred Units.
(ii) If the Partnership gives a notice of redemption
in respect of Series B Preferred Units (which notice will be irrevocable) then,
by 12:00 noon, New York City time, on the redemption date, the Partnership will
deposit irrevocably in trust for the benefit of the Series B Preferred Units
being redeemed funds sufficient to pay the applicable Redemption Price and will
give irrevocable instructions and authority to pay such Redemption Price to the
holders of the Series B Preferred Units upon surrender of the Series B Preferred
Units by such holders at the place designated in the notice of redemption. If
the Series B Preferred Units are evidenced by a certificate and if fewer than
all Series B Preferred Units evidenced any certificate are being redeemed, a new
certificate shall be issued upon surrender of the certificate evidencing all
Series B Preferred Units, evidencing the unredeemed Series B Preferred Units
without cost to the holder thereof. On and after the date of redemption,
distributions will cease to accumulate on the Series B Preferred Units or
portions thereof called for redemption, unless the Partnership defaults in the
payment thereof. If any date fixed for redemption of Series B Preferred Units is
not a Business Day, then payment of the Redemption Price payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date fixed for redemption. If payment of the Redemption Price
is improperly withheld or refused and not paid by the Partnership, distributions
on such Series B Preferred Units will continue to accumulate from the original
redemption date to the date of payment, in which case the actual
12
payment date will be considered the date fixed for redemption for purposes of
calculating the applicable Redemption Price.
Section 8. Voting Rights.
(a) General. Holders of the Series B Preferred Units will
not have any voting rights or right to consent to any matter requiring the
consent or approval of the Limited Partners, except as otherwise expressly set
forth in the Partnership Agreement and except as set forth below.
(b) Certain Voting Rights. So long as any Series B Preferred
Units remain outstanding, the Partnership shall not, without the affirmative
vote of the holders of at least two-thirds of the Series B Preferred Units
outstanding at the time (i) authorize or create, or increase the authorized or
issued amount of, any class or series of Partnership Interests ranking prior to
the Series B Preferred Units with respect to payment of distributions or rights
upon liquidation, dissolution or winding-up or reclassify any Partnership
Interests of the Partnership into such Partnership Interest, or create,
authorize or issue any obligations or security convertible into or evidencing
the right to purchase any such Partnership Interest, (ii) authorize or create,
or increase the authorized or issued amount of any Parity Preferred Units or
reclassify any Partnership interest of the Partnership into any such Partnership
Interest or create, authorize or issue any obligations or security convertible
into or evidencing the right to purchase any such Partnership Interests but only
to the extent such Parity Preferred Units are issued to an affiliate of the
Partnership, other than (A) Security Capital U.S. Realty, Security Capital
Holdings, S.A. or their affiliates purchasing preferred stock of the same series
on the same terms as non-affiliates or (B) the General Partner to the extent the
issuance of such interests was to allow the General Partner to issue
corresponding preferred stock to persons who are not affiliates of the
Partnership in the same transaction or (iii) either (A) consolidate, merge into
or with, or convey, transfer or lease its assets substantially as an entirety
to, any corporation or other entity or (B) amend, alter or repeal the provisions
of the Partnership Agreement, whether by merger, consolidation or otherwise,
that would materially and adversely affect the powers, special rights,
preferences, privileges or voting power of the Series B Preferred Units or the
holders thereof; provided, however, that with respect to the occurrence of a
merger, consolidation or a sale or lease of all of the Partnership's assets as
an entirety, so long as (a) the Partnership is the surviving entity and the
Series B Preferred Units remain outstanding with the terms thereof unchanged, or
(b) the resulting, surviving or transferee entity is a partnership, limited
liability company or other pass-through entity organized under the laws of any
state and substitutes the Series B Preferred Units for other interests in such
entity having substantially the same terms and rights as the Series B Preferred
Units, including with respect to distributions, voting rights and rights upon
liquidation, dissolution or winding-up, then the occurrence of any such event
shall not be deemed to materially and adversely affect such rights, privileges
or voting powers of the holders of the Series B Preferred Units and no vote of
the Series B Preferred Units shall be required in such case; and provided
further than any increase in the amount of Partnership Interests or the creation
or issuance of any other class or series of Partnership Interests, in each case
ranking (a) junior to the Series B Preferred Units with respect to payment of
distributions and the
13
distribution of assets upon liquidation, dissolution or winding-up, or (b) on a
parity to the Series B Preferred Units with respect to payment of distributions
and the distribution of assets upon liquidation, dissolution or winding-up to
the extent such Partnership Interests are not issued to an affiliate of the
Partnership, other than (A) Security Capital U.S. Realty, Security Capital
Holdings, S.A. or their affiliates purchasing Partnership interests of the same
series on the same terms as non-affiliates, or (B) the General Partner to the
extent the issuance of such interests was to allow the General Partner to issue
corresponding preferred stock to persons who are not affiliates of the
Partnership, shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting powers and no vote of the Series B Preferred
Units shall be required in such case.
In addition to the foregoing, the Partnership will not (x) enter into
any contract, mortgage, loan or other agreement that prohibits or restricts, or
has the effect of prohibiting or restricting, the ability of a Preferred Partner
to exercise its rights set forth herein to effect in full an exchange or
redemption pursuant to Section 10, except with the written consent of the
holders of at least two-thirds of the Series B Preferred Units outstanding at
the time; or (y) amend, alter, or repeal or waive Section 7.5 of the Fourth
Amended Agreement (to the extent in effect) or, until December 31, 2000, Section
11.3(i) of the Partnership Agreement if such amendment, alteration or waiver
adversely affects the holders of Series B Preferred Units without the
affirmative vote of at least two-thirds of the Series B Preferred Units
outstanding at the time.
Notwithstanding anything to the contrary in this Section 8, in no event
shall the General Partner or any of its affiliates have any voting, consent or
approval rights in respect of any Series B Preferred Units it or they may hold,
and any percentage or portion of outstanding Series B Preferred Units that may
be required hereunder for any vote, consent or approval of holders thereof shall
be determined as if all Series B Preferred Units then held by the General
Partner or any of its affiliates were not outstanding.
Section 9. Transfer Restrictions.
(a) The Series B Preferred Units shall not be subject to the
provisions of Article 11 of the Partnership Agreement other than Sections
11.1(a), 11.3(b), 11.3(c), 11.3(d), 11.3(e), 11.3(f), 11.3(g), 11.3(i) and 11.6.
(b) No transfer of the Series B Preferred Units may be made
without the consent of the General Partner, which consent may be given or
withheld in its sole and absolute discretion, if such transfer would result in
more than four partners holding all outstanding Series B Preferred Units within
the meaning of Treasury Regulation Section 1.7704-1(h)(1)(ii) (without regard to
Treasury Regulation Section 1.7704-1(h)(3)(ii)); provided, however, that the
General Partner's consent may not be unreasonably withheld if (a) such transfer
would not result in more than four (4) partners holding all outstanding Series B
Preferred Units within the meaning of such Treasury Regulation Sections or (b)
the General Partner is relying on a provision other than Treasury Regulation
Section 1.7704-1(h) to avoid classification of Operating Partnership as a PTP.
In addition, no transfer may be
14
made to any person if such transfer would cause the exchange of the Series B
Preferred Units for Series B Preferred Stock, as provided herein, to be required
to be registered under the Securities Act, or any state securities laws.
Notwithstanding anything in this Agreement to the contrary, the Series B
Preferred Units shall be freely transferable to LLC, which shall upon such
transfer be admitted as a Limited Partner hereunder.
Section 10. Exchange Rights.
(a) Right to Exchange.
(i) Series B Preferred Units will be exchangeable in
whole or in part at anytime on or after the tenth anniversary of the date of
issuance, at the option of the holders thereof, for authorized but previously
unissued shares of 8.75% Series B Cumulative Redeemable Preferred Stock of the
General Partner (the "Series B Preferred Stock") at an exchange rate of one
share of Series B Preferred Stock for one Series B Preferred Unit , subject to
adjustment as described below (the "Exchange Price"), provided that the Series B
Preferred Units will become exchangeable at any time, in whole or in part, at
the option of the holders of Series B Preferred Units for Series B Preferred
Stock if (y) at any time full distributions shall not have been timely made on
any Series B Preferred Unit with respect to six (6) prior quarterly distribution
periods, whether or not consecutive, provided, however, that a distribution in
respect of Series B Preferred Units shall be considered timely made if made
within two (2) Business Days after the applicable Preferred Unit Distribution
Payment Date if at the time of such late payment there shall not be any prior
quarterly distribution periods in respect of which full distributions were not
timely made or (z) upon receipt by a holder or holders of Series B Preferred
Units of (A) notice from the General Partner that the General Partner or a
subsidiary of the General Partner has become aware of facts that will or likely
will cause the Partnership to become a PTP and (B) an opinion rendered by an
outside nationally recognized independent counsel familiar with such matters
addressed to a holder or holders of Series B Preferred Units, that the
Partnership is or likely is, or upon the occurrence of a defined event in the
immediate future will be or likely will be, a PTP. In addition, the Series B
Preferred Units may be exchanged for Series B Preferred Stock, in whole or in
part, at the option of any holder prior to the tenth anniversary of the issuance
date and after the third anniversary thereof if such holder of a Series B
Preferred Units shall deliver to the General Partner either (i) a private letter
ruling addressed to such holder of Series B Preferred Units or (ii) an opinion
of independent counsel reasonably acceptable to the General Partner based on the
enactment of temporary or final Treasury Regulations or the publication of a
Revenue Ruling, in either case to the effect that an exchange of the Series B
Preferred Units at such earlier time would not cause the Series B Preferred
Units to be considered "stock and securities" within the meaning of Section
351(e) of the Internal Revenue Code of 1986, as amended (the "Code") for
purposes of determining whether the holder of such Series B Preferred Units is
an "investment company" under Section 721(b) of the Code if an exchange is
permitted at such earlier date. Furthermore, the Series B Preferred Units may be
exchanged in whole or in part for Series B Preferred Stock at any time after the
date hereof, if both (1) the holder thereof concludes based on results or
projected results that there exists (in the reasonable judgment of the holder)
an imminent and substantial risk that the holder's interest in
15
the Partnership does or will represent more than 19.5% of the total profits or
capital interests in the Partnership (determined in accordance with Treasury
Regulations Section 1.731-2(e)(4)) for a taxable year, and (2) the holder
delivers to the General Partner an opinion of nationally recognized independent
counsel to the effect that there is an imminent and substantial risk that the
holder's interest in the Partnership does or will represent more than 19.5% of
the total profits or capital interests in the Partnership (determined in
accordance with Treasury Regulations Section 1.731-2(e)(4)) for a taxable year.
(ii) Notwithstanding anything to the contrary set
forth in Section 10(a)(i), if an Exchange Notice (as defined herein) has been
delivered to the General Partner, then the General Partner may, at its option,
elect to redeem or cause the Partnership to redeem all or a portion of the
outstanding Series B preferred Units for cash in an amount equal to the original
Capital Contribution per Series B Preferred Unit and all accrued and unpaid
distributions thereon to the date of redemption. The General Partner may
exercise its option to redeem the Series B Preferred Units for cash pursuant to
this Section 10(a)(ii) by giving each holder of record of Series B Preferred
Units notice of its election to redeem for cash, within five (5) Business Days
after receipt of the Exchange Notice, by (i) fax, and (ii) registered mail,
postage paid, at the address of each holder as it may appear on the records of
the Partnership stating (i) the redemption date, which shall be no later than
sixty (60) days following the receipt of the Exchange Notice, (ii) the
redemption price, (iii) the place or places where the Series B Preferred Units
are to be surrendered for payment of the redemption price, (iv) that
distribution on the Series B Preferred Units will cease to accrue on such
redemption date; (v) that payment of the redemption price will be made upon
presentation and surrender of the Series B Preferred Units and (vi) the
aggregate number of Series B Preferred Units to be redeemed, and if fewer than
all of the outstanding Series B Preferred Units are to be redeemed, the number
of Series B Preferred Units to be redeemed held by such holder, which number
shall equal such holder's pro-rata share (based on the percentage of the
aggregate number of outstanding Series B Preferred Units the total number of
Series B Preferred Units held by such holder represents) of the aggregate number
of Series B Preferred Units being redeemed.
(iii) Upon the occurrence of an event giving rise to
exchange rights pursuant to Section 10(a)(i), in the event an exchange of all or
a portion of Series B Preferred Units pursuant to Section 10(a)(i) would violate
the provisions on ownership limitation of the General Partner set forth in
Article 5 of the Charter, the General Partner shall give written notice thereof
to each holder of record of Series B Preferred Units, within five (5) Business
Days following receipt of the Exchange Notice, by (i) fax, and (ii) registered
mail, postage prepaid, at the address of each such holder set forth in the
records of the Partnership. In such event, each holder of Series B Preferred
Units shall be entitled to exchange, pursuant to the provision of Section 10(b)
a number of Series B Preferred Units which would comply with the provisions on
the ownership limitation of the General Partner set forth in such Article 5 of
the Charter and any Series B Preferred Units not so exchanged (the "Excess
Units") shall be redeemed by the Partnership for cash in an amount equal to the
original Capital Contribution per Excess Unit, plus any accrued and unpaid
distributions thereon, whether or not declared, to the date of redemption. The
written notice of the General Partner shall state (i) the number of Excess Units
held by such holder, (ii) the redemption price of the Excess Units, (iii) the
date
16
on which such Excess Units shall be redeemed, which date shall be no later
than sixty (60) days following the receipt of the Exchange Notice, (iv) the
place or places where such Excess Units are to be surrendered for payment of the
Redemption Price, (v) that distributions on the Excess Units will cease to
accrue on such redemption date, and (vi) that payment of the redemption price
will be made upon presentation and surrender of such Excess Units. In the event
an exchange would result in Excess Units, as a condition to such exchange, each
holder of such units agrees to provide representations and covenants reasonably
requested by the General Partner relating to (i) the widely held nature of the
interests in such holder, sufficient to assure the General Partner that the
holder's ownership of stock of the General Partner (without regard to the limits
described above) will not cause any individual to own in excess of 9.8% of the
stock of the General Partner, to the extent such holder can reasonably make such
representation; and (ii) to the extent such holder can so represent and covenant
without obtaining information from its owners, the holder's ownership of tenants
of the Partnership and its affiliates.
To the extent the General Partner would not be able to pay the cash set
forth above in exchange for the Excess Units, and to the extent consistent with
the Charter, the General Partner agrees that it will grant to the holders of the
Series B Preferred Units exceptions to the Beneficial Ownership Limit and
Constructive Ownership Limit set forth in the Series B Articles Supplementary
sufficient to allow such holders to exchange all of their Series B Preferred
Units for Series B Preferred Stock, provided such holders furnish to the General
Partner representations acceptable to the General Partner in its sole and
absolute discretion which assure the General Partner that such exceptions will
not jeopardize the General Partner's tax status as a REIT for purposes of
federal and applicable state law.
Notwithstanding any provision of this Agreement to the contrary, no
Series B Limited Partner shall be entitled to effect an exchange of Series B
Preferred Units for Series B Preferred Stock to the extent that ownership or
right to acquire such shares would cause the Partner or any other Person or, in
the opinion of counsel selected by the General Partner, may cause the Partner or
any other Person, to violate the restrictions on ownership and transfer of
Series B Preferred Stock set forth in the Charter. To the extent any such
attempted exchange for Series B Preferred Stock would be in violation of the
previous sentence, it shall be void ab initio and such Series B Limited Partner
shall not acquire any rights or economic interest in the Series B Preferred
Stock otherwise issuable upon such exchange.
(iv) The redemption of Series B Preferred Units
described in Section 10(a)(ii) and (iii) shall be subject to the provisions of
Section 7(b)(i) and Section 7(c)(ii); provided, however, that for purposes
hereof the term "Redemption Price" in Sections 7(b)(i) and 7(c)(ii) shall be
read to mean the original Capital Contribution per Series B Preferred Unit being
redeemed plus all accrued and unpaid distributions to the redemption date.
17
(b) Procedure for Exchange.
(i) Any exchange shall be exercised pursuant to a
notice of exchange (the "Exchange Notice") delivered to the General Partner by
the holder who is exercising such exchange right, by (i) fax and (ii) by
certified mail postage prepaid. Upon request of the General Partner, such holder
delivering the Exchange Notice shall provide to the General Partner in writing
such information as the General Partner may reasonably request to determine
whether any portion of the exchange by the delivering holder will result in the
violation of the restrictions of Article 5 of the Charter, including the
Ownership Limit and the Related Tenant Limit. The exchange of Series B Preferred
Units, or a specified portion thereof, may be effected after the fifth (5th)
Business Days following receipt by the General Partner of the Exchange Notice
and such requested information by delivering certificates, if any, representing
such Series B Preferred Units to be exchanged together with, if applicable,
written notice of exchange and a proper assignment of such Series B Preferred
Units to the office of the General Partner maintained for such purpose.
Currently, such office is 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxxx,
Xxxxxxx 00000. Each exchange will be deemed to have been effected immediately
prior to the close of business on the date on which such Series B Preferred
Units to be exchanged (together with all required documentation) shall have been
surrendered and notice shall have been received by the General Partner as
aforesaid and the Exchange Price shall have been paid. Any Series B Preferred
Stock issued pursuant to this Section 10 shall be delivered as shares which are
duly authorized, validly issued, fully paid and nonassessable, free of pledge,
lien, encumbrance or restriction other than those provided in the Charter, the
Bylaws of the General Partner, the Securities Act and relevant state securities
or blue sky laws.
(ii) In the event of an exchange of Series B
Preferred Units for shares of Series B Preferred Stock, an amount equal to the
accrued and unpaid distributions which are not paid pursuant to Section 4(a)
hereof, whether or not declared, to the date of exchange on any Series B
Preferred Units tendered for exchange shall (i) accrue and be payable by the
General Partner from and after the date of exchange on the shares of the Series
B Preferred Stock into which such Series B Preferred Units are exchanged, and
(ii) continue to accrue on such Series B Preferred Units, which shall remain
outstanding following such exchange, with the General Partner as the holder of
such Series B Preferred Units. Notwithstanding anything to the contrary set
forth herein, in no event shall a holder of a Series B Preferred Unit that was
validly exchanged into Series B Preferred Stock pursuant to this section (other
than the General Partner now holding such Series B Preferred Unit), receive a
distribution out of Available Cash or Capital Transaction Proceeds of the
Partnership with respect to any Series B Preferred Units so exchanged.
(iii) Fractional shares of Series B Preferred Stock
are not to be issued upon exchange but, in lieu thereof, the General Partner
will pay a cash adjustment based upon the fair market value of the Series B
Preferred Stock on the day prior to the exchange date as determined in good
faith by the Board of Directors of the General Partner.
18
(c) Adjustment of Series B Exchange Price. In case the
General Partner shall be a party to any transaction (including, without
limitation, a merger, consolidation, statutory share exchange, tender offer for
all or substantially all of the General Partner's capital stock or sale of all
or substantially all of the General Partner's assets), in each case as a result
of which the Series B Preferred Stock will be converted into the right to
receive shares of capital stock, other securities or other property (including
cash or any combination thereof), each Series B Preferred Unit will thereafter
be exchangeable into the kind and amount of shares of capital stock and other
securities and property receivable (including cash or any combination thereof)
upon the consummation of such transaction by a holder of that number of Series B
Preferred Stock or fraction thereof into which one Series B Preferred Unit was
exchangeable immediately prior to such transaction. The General Partner may not
become a party to any such transaction, whether or not any Series B Preferred
Stock are then outstanding: (i) which does not preserve the existence of the
Series B Preferred Stock with their current rights, preferences and privileges,
or (ii) if the terms thereof are inconsistent with the foregoing. In addition,
so long as a Preferred Partner or any of its permitted successors or assigns
holds any Series B Preferred Units as the case may be, the General Partner shall
not, without the affirmative vote of the holders of at least two-thirds of the
Series B Preferred Units (voting together as a class with any outstanding Series
B Preferred Stock) outstanding at the time: (a) designate or create, or increase
the authorized or issued amount of, any class or series of shares ranking senior
to the Series B Preferred Stock with respect to the payment of distributions or
rights upon liquidation, dissolution or winding-up or reclassify any authorized
shares of the General Partner into any such shares, or create, authorize or
issue any obligations or securities convertible into or evidencing the right to
purchase any such shares; (b) designate or create, or increase the authorized or
issued amount of, any Parity Preferred Stock or reclassify any authorized shares
of the General Partner into any such shares, or create, authorize or issue any
obligations or security convertible into or evidencing the right to purchase any
such shares, but only to the extent that such Parity Preferred Stock are issued
to an Affiliate of the General Partner other than (A) Security Capital U.S.
Realty, Security Capital Holdings, S.A. or their affiliates if issued on the
same terms in the transaction as to non-affiliates, or (B) the General Partner
to the extent the issuance of such interests was to allow the General Partner to
issue corresponding preferred stock in the same transaction to persons who are
not affiliates of the Partnership; (c) amend, alter or repeal the provisions of
the Charter or bylaws of the General Partner, whether by merger, consolidation
or otherwise, that would materially and adversely affect the powers, special
rights, preferences, privileges or voting power of the Series B Preferred Stock
or the holders thereof; provided, however, that any increase in the amount of
authorized Preferred Stock or the creation or issuance of any other series or
class of Preferred Stock, or any increase in the amount of authorized shares of
each class or series, in each case ranking either (1) junior to the Series B
Preferred Stock with respect to the payment of distributions and the
distribution of assets upon liquidation, dissolution or winding-up, or (2) on a
parity with the Series B Preferred Stock with respect to the payment of
distributions and the distribution of assets upon liquidation, dissolution or
winding-up to the extent such Preferred Stock are not issued to an Affiliate of
the Company, other than the General Partner to the extent the issuance of such
interests was to allow the General Partner to issue corresponding preferred
stock to persons who are not affiliates of the
19
Partnership, shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting powers.
Section 11. No Conversion Rights. The holders of the Series B
Preferred Units shall not have any rights to convert such Partnership Units into
any other class of Partnership Interests or any interest in the Partnership.
Section 12. No Sinking Fund. No sinking fund shall be established
for the retirement or redemption of the Series B Preferred Units.
Section 13. Miscellaneous.
(a) The terms "Original Limited Partnership Units," "Class B
Units," "Class 2 Units," "Class Z Branch Partners," "Class Z Midland Partners"
"Additional Units," "Additional Limited Partners," "Common Units" and "General
Partner Units" and "Percentage Interest" in the Partnership Agreement shall not
be deemed to include the Series B Preferred Units. The terms "Limited
Partnership Interest" and "Partnership Interest" shall be deemed to include the
Series B Preferred Units.
(b) Exhibit A to the Partnership Agreement is hereby amended
to include the Series B Preferred Units as Limited Partnership Interests.
(c) Section 7.1(h) of the Partnership Agreement is hereby
amended to include the Series B Priority Return Amount.
(d) Nothing contained in Section 8.4 or the last sentence of
Section 13.6 of the Partnership Agreement shall be deemed to limit the issuance
of, and provisions applicable to, the Series B Preferred Units.
(e) Notwithstanding anything to the contrary contained in
Section 8.6 of the Partnership Agreement, in no event shall the rights of the
holders of the Series B Preferred Units set forth in Section 10 of this
Agreement be subordinate to the Redemption Rights set forth in Section 8.6 of
the Partnership Agreement.
(f) Notwithstanding any other provisions of this Amendment,
this Amendment shall not be amended, and no action may be taken by the General
Partner, without the Consent of each Partner adversely affected if such
amendment or action would alter the redemption or exchange rights as set forth
in Sections 7 and 10 hereof, respectively or amend this Section 14(f).
(g) Upon effectiveness of the Fourth Amended Agreement, the
Fourth Amended Agreement shall be amended, to the extent applicable, to
incorporate this Amendment and be consistent herewith.
(h) At such time, and in the event that, the Company
authorizes sufficient additional shares of preferred stock, the holders of a
majority in interest of the Series B
20
Preferred Units and Series B Preferred Stock in the aggregate may request in
writing to the Company that the stated value of the Series B Priority Return may
be reduced to $25, with all reference herein to "$100" to thereafter be deemed
references to "$25," and with appropriate proportionate adjustments to be made
herein, mutatis mutandis, in distributions, liquidation preferences, shares
issuable upon exchange, and otherwise as necessary and appropriate to preserve
the economic value of Series B Preferred Units and the Series B Preferred Stock,
and the Company shall take all reasonable steps necessary and appropriate to
give effect to such request.
21
GENERAL PARTNER
Regency Realty Corporation
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxx
Its Managing Director and Executive
Vice President
CONTRIBUTOR
TIMES MIRROR COMPANY
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Sr. Vice President
SECURITY CAPITAL U.S. REALTY
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
SECURITY CAPITAL HOLDINGS S.A.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
ARDEN SQUARE HOLDINGS SARL
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Sarl Manager
BLOSSOM VALLEY HOLDINGS SARL
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Sarl Manager
XXXXXX STREET PLAZA HOLDINGS SARL
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Sarl Manager
DALLAS HOLDINGS SARL
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Sarl Manager
EL CAMINO HOLDINGS SARL
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Sarl Manager
FRIARS MISSION HOLDINGS SARL
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Sarl Manager
Regency Centers, L.P.
Amendment Dated April 3, 2003 to Fourth Amended and Restated
Agreement of Limited Partnership
Relating to 7.45% Series 3 Cumulative Redeemable Preferred Units
This Amendment (this "Amendment") to the Fourth Amended and Restated
Agreement of Limited Partnership, dated as of April 1, 2001 (as amended through
the date hereof, the "Partnership Agreement"), of Regency Centers, L.P., a
Delaware limited partnership (the "Partnership"), is made as of the 3rd day of
April, 2003, by Regency Centers Corporation, a Florida corporation, as general
partner (the "General Partner"), and Regency Centers Texas LLC, as limited
partner (all capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Partnership Agreement).
RECITALS
WHEREAS, the General Partner has sold 3,000,000 depositary shares, each
representing a 1/10 interest in a share of the General Partner's 7.45% Series 3
Cumulative Redeemable Preferred Stock, $0.01 par value, having a liquidation
preference of $250 per share (the "Series 3 Preferred Stock") and in connection
therewith has issued to Wachovia Bank National Association, as depositary,
300,000 shares of Series 3 Preferred Stock;
WHEREAS, Section 4.2(b) of the Partnership Agreement provides for the
issuance by the Partnership to the General Partner of Partnership Interests in
the same number and having designations, preferences and other rights
substantially similar to the designations, preferences and other rights of
shares issued by the General Partner;
WHEREAS, the General Partner has contributed the proceeds from the sale
of such depositary shares to the Partnership;
WHEREAS, Regency Centers Texas LLC is a wholly-owned subsidiary of the
General Partner, and the General Partner desires to contribute the Series 3
Preferred Units (as defined below) so issued to Regency Centers Texas LLC;
NOW, THEREFORE, pursuant to the authority contained in Section 4.2(b)
of the Partnership Agreement, the General Partner hereby amends the Partnership
Agreement as follows and hereby causes the issuance of the Series 3 Preferred
Units in the name of Regency Centers Texas LLC effective as of the date hereof:
Section 1. Designation and Number. A series of Preferred Units,
designated the "7.45% Series 3 Cumulative Redeemable Preferred Units" (the
"Series 3 Preferred Units"), is hereby established. The number of Series 3
Preferred Units shall be 300,000.
Section 2. Rank. The Series 3 Preferred Units will, with respect to
distributions and rights upon voluntary or involuntary liquidation, winding-up
or dissolution of the Partnership, rank senior to all classes or series of
Common Units and to all classes or series of equity securities of the
Partnership now or hereafter authorized, issued or outstanding, other than any
class or series of equity securities of the Partnership expressly designated as
ranking on a parity with or senior to the Series 3 Preferred Units as to
distributions or rights upon voluntary or involuntary liquidation, winding-up or
dissolution of the Partnership or both. For purposes of these Articles of
Amendment,
the term "Parity Preferred Units" shall be used to refer to any class or series
of equity securities of the Partnership now or hereafter authorized, issued or
outstanding expressly designated by the Partnership to rank on a parity with
Series 3 Preferred Units with respect to distributions or rights upon voluntary
or involuntary liquidation, winding-up or dissolution of the Partnership or
both, as the context may require, whether or not the distribution rates,
distribution payment dates or redemption or liquidation prices per unit shall be
different from those of the Series 3 Preferred Units and includes the Series A
Cumulative Redeemable Preferred Units, the Series B Cumulative Redeemable
Preferred Units, the Series C Cumulative Redeemable Preferred Units, the Series
D Cumulative Redeemable Preferred Units, the Series E Cumulative Redeemable
Preferred Units and the Series F Cumulative Convertible Redeemable Preferred
Units of the Partnership. The term "equity securities" does not include debt
securities, which will rank senior to the Series 3 Preferred Units.
Section 3. Distributions.
(a) Payment of Distributions. Subject to the rights of
holders of Parity Preferred Units as to the payment of distributions and holders
of equity securities issued after the date hereof in accordance with the
Partnership Agreement ranking senior to the Series 3 Preferred Units as to
payment of distributions, holders of Series 3 Preferred Units shall be entitled
to receive, when, as and if declared by the Partnership acting through the
General Partner, out of Available Cash and Capital Transaction Proceeds legally
available for the payment of distributions, cumulative cash distributions at the
rate per annum of 7.45% of the $250 liquidation preference per Series 3
Preferred Unit. Such distributions shall be cumulative, shall accrue from the
original date of issuance and will be payable in cash (A) quarterly (such
quarterly periods for purposes of payment and accrual will be the quarterly
periods ending on the dates specified in this sentence) in arrears, on or before
March 31, June 30, September 30 and December 31 of each year commencing on June
30, 2003 and, (B) in the event of a redemption, on the redemption date (each a
"Preferred Unit Distribution Payment Date"). The amount of the distribution
payable for any period will be computed on the basis of a 360-day year of twelve
30-day months and for any period shorter than a full quarterly period for which
distributions are computed, the amount of the distribution payable will be
computed on the basis of the ratio of the actual number of days elapsed in such
period to ninety (90) days. If any date on which distributions are to be made on
the Series 3 Preferred Units is not a Business Day, then payment of the
distribution to be made on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date.
(b) Limitation on Distributions. No distribution on the
Series 3 Preferred Units shall be declared or paid or set apart for payment by
the Partnership at such time as the terms and provisions of any agreement of the
Partnership relating to its indebtedness, prohibit such declaration, payment or
setting apart for payment or provide that such declaration, payment or setting
apart for payment would constitute a breach thereof or a default thereunder, or
if such declaration, payment or setting apart for payment shall be restricted or
prohibited by law. Nothing in this Section 3(b) shall be deemed to modify or in
any manner limit the provisions of Section 3(c) and 3(d).
(c) Distributions Cumulative. Distributions on the Series 3
Preferred Units will accrue whether or not the terms and provisions of any
agreement of the Partnership, including any agreement relating to its
indebtedness, at any time prohibit the current payment of distributions,
2
whether or not the Partnership has earnings, whether or not there are funds
legally available for the payment of such distributions and whether or not such
distributions are authorized or declared. Accrued but unpaid distributions on
the Series 3 Preferred Units will accumulate as of the Preferred Unit
Distribution Payment Date on which they first become payable. Distributions on
account of arrears for any past distribution periods may be declared and paid at
any time, without reference to a regular Preferred Unit Distribution Payment
Date. Accumulated and unpaid distributions will not bear interest.
(d) Priority as to Distributions.
(i) So long as any Series 3 Preferred Units are
outstanding, no distribution of cash or other property shall be
authorized, declared, paid or set apart for payment on or with respect
to any class or series of Common Units or any other class or series of
equity securities of the Partnership ranking junior to the Series 3
Preferred Units as to the payment of distributions (such Common Units
or other junior equity securities, collectively, "Junior Units"), nor
shall any cash or other property be set aside for or applied to the
purchase, redemption or other acquisition for consideration of any
Series 3 Preferred Units, any Parity Preferred Units with respect to
distributions or any Junior Units, unless, in each case, all
distributions accumulated on all Series 3 Preferred Units and all
classes and series of outstanding Parity Preferred Units with respect
to distributions have been paid in full. The foregoing sentence will
not prohibit (i) distributions payable solely in shares of Junior
Units, (ii) the conversion of Junior Units or Parity Preferred Units
into Junior Units, (iii) the redemption of Partnership Interests
corresponding to any Series 3 Preferred Stock or other equity
securities of the General Partner, regardless of class or series, to be
purchased by the General Partner pursuant to Article 5 of the Articles
of Incorporation to preserve the General Partner's status as a real
estate investment trust, provided that such redemption shall be upon
the same terms as the corresponding purchase pursuant to Article 5 of
the Articles of Incorporation, and (iv) the redemption of Series 3
Preferred Units corresponding to any redemption by the General Partner
of the same number of shares of Series 3 Preferred Stock if such
redemption by the General Partner is permitted by the Articles of
Incorporation.
(ii) So long as distributions have not been paid in
full (or a sum sufficient for such full payment is not irrevocably
deposited in trust for payment) upon the Series 3 Preferred Units, all
distributions authorized and declared on the Series 3 Preferred Units
and all classes or series of outstanding Parity Preferred Units with
respect to distributions shall be authorized and declared so that the
amount of distributions authorized and declared per share of Series 3
Preferred Units and such other classes or series of Parity Preferred
Units shall in all cases bear to each other the same ratio that accrued
distributions per share on the Series 3 Preferred Units and such other
classes or series of Parity Preferred Units (which shall not include
any accumulation in respect of unpaid distributions for prior
distribution periods if such class or series of Parity Preferred Units
does not have cumulative distribution rights) bear to each other.
(e) No Further Rights. Holders of Series 3 Preferred Units
shall not be entitled to any distributions, whether payable in cash, other
property or otherwise, in excess of the full cumulative distributions described
herein.
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Section 4. Liquidation Preference.
(a) Payment of Liquidating Distributions. Subject to the
rights of holders of Parity Preferred Units with respect to rights upon any
voluntary or involuntary liquidation, dissolution or winding-up of the
Partnership and subject to equity securities ranking senior to the Series 3
Preferred Units with respect to rights upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership, the holders of Series
3 Preferred Units shall be entitled to receive out of the assets of the
Partnership legally available for distribution or the proceeds thereof, after
payment or provision for debts and other liabilities of the Partnership, but
before any payment or distributions of the assets shall be made to holders of
Common Units or any other class or series of units of Partnership Interests that
rank junior to the Series 3 Preferred Units as to rights upon liquidation,
dissolution or winding-up of the Partnership, an amount equal to the sum of (i)
a liquidation preference of $250 per Series 3 Preferred Unit, and (ii) an amount
equal to any accumulated and unpaid distributions thereon, whether or not
declared, to the date of payment. In the event that, upon such voluntary or
involuntary liquidation, dissolution or winding-up, there are insufficient
assets to permit full payment of liquidating distributions to the holders of
Series 3 Preferred Units and any Parity Preferred Units as to rights upon
liquidation, dissolution or winding-up of the Partnership, all payments of
liquidating distributions on the Series 3 Preferred Units and such Parity
Preferred Units shall be made so that the payments on the Series 3 Preferred
Units and such Parity Preferred Units shall in all cases bear to each other the
same ratio that the respective rights of the Series 3 Preferred Units and such
other Parity Preferred Units (which shall not include any accumulation in
respect of unpaid distributions for prior distribution periods if such Parity
Preferred Units do not have cumulative distribution rights) upon liquidation,
dissolution or winding-up of the Partnership bear to each other.
(b) No Further Rights. After payment of the full amount of
the liquidating distributions to which they are entitled, the holders of Series
3 Preferred Units will have no right or claim to any of the remaining assets of
the Partnership.
(c) Consolidation, Merger or Certain Other Transactions. The
voluntary sale, conveyance, lease, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all of the
property or assets of the Partnership to, or the consolidation or merger or
other business combination of the Partnership with or into, any corporation,
trust or other entity (or of any corporation, trust or other entity with or into
the Partnership) shall not be deemed to constitute a liquidation, dissolution or
winding-up of the Partnership.
(d) Permissible Distributions. In determining whether a
distribution (other than upon voluntary liquidation) by distribution, redemption
or other acquisition of Partnership Interests or otherwise is permitted under
the Act, no effect shall be given to amounts that would be needed, if the
Partnership were to be dissolved at the time of the distribution, to satisfy the
preferential rights upon dissolution of holders of equity securities of the
Partnership whose preferential rights upon dissolution are superior to those
receiving the distribution.
Section 5. Redemption.
(a) Mandatory Redemption. The Series 3 Preferred Units may
not be redeemed except to the extent that the General Partner redeems the Series
3 Preferred Stock, in which case the Partnership shall redeem one Series 3
Preferred Unit for each share of Series 3 Preferred Stock that the General
Partner redeems.
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(b) Status of Redeemed Units. Any Series 3 Preferred Units
that shall at any time have been redeemed shall after such redemption, have the
status of authorized but unissued Preferred Units, without designation as to
class or series until such units are once more designated as part of a
particular class or series by the General Partner.
Section 6. Voting Rights. Holders of the Series 3 Preferred Units
will not have any voting rights, except as required by the Act.
Section 7. No Conversion Rights. The holders of the Series 3
Preferred Units shall not have any rights to convert such units into shares of
any other class or series of stock or into any other securities of, or interest
in, the Partnership.
Section 8. No Sinking Fund. No sinking fund shall be established
for the retirement or redemption of Series 3 Preferred Units. Section 9.
Reaffirmation. Except as modified herein, all terms and conditions of the
Partnership Agreement shall remain in full force and effect, which terms and
conditions the General Partner hereby ratifies and confirms.
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IN WITNESS WHEREOF, this Amendment has been executed as of the date
first above written.
GENERAL PARTNER
REGENCY CENTERS CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Director and Chief
Financial Officer
LIMITED PARTNER
REGENCY CENTERS TEXAS LLC
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Director and Chief
Financial Officer
