Exhibit 10.7
FOURTEENTH AMENDMENT TO SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
XXXXXXXX PROPERTIES ACQUISITION PARTNERS, L.P.
THIS FOURTEENTH AMENDMENT, dated as of ___________, 2001 (the
"Fourteenth Amendment"), amends the Second Amended and Restated Agreement of
Limited Partnership (as heretofore amended to date, the "Partnership Agreement")
of XXXXXXXX PROPERTIES ACQUISITION PARTNERS, L.P., a Delaware limited
partnership (the "Partnership"). Capitalized terms used herein but not defined
herein shall have the meanings given to such terms in the Partnership Agreement.
BACKGROUND
Pursuant to the Partnership Agreement, Xxxxxxxx Properties I,
Inc., a Delaware corporation (the "General Partner"), as the general partner of
the Partnership, has the power and authority to issue additional Partnership
Interests in one or more newly created series of Partnership Interests to
persons on such terms and conditions as the General Partner may deem
appropriate.
The General Partner, pursuant to the exercise of such power
and authority and in accordance with the Partnership Agreement, has determined
to execute this Amendment to the Partnership Agreement to create a new series of
Partnership Interests to be designated as 7.5% Series E Cumulative Preferred
Units and to evidence the issuance of such additional Partnership Interests and
the admission of Brandywine Operating Partnership, L.P., a Delaware limited
partnership ("Brandywine") as a Limited Partner of the Partnership in exchange
for certain contributions of interests in real estate and real estate related
assets that are being made to the Partnership on the date hereof pursuant to
that certain Contribution Agreement, dated as of ________, 2001 between the
Partnership and Brandywine (the "Contribution Agreement).
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby amend the Partnership Agreement as
follows:
1. In accordance with the Partnership Agreement, SECTION 4.02
of the Partnership Agreement is hereby amended by adding SECTION 4.02(g) to
establish, and to issue to Brandywine, the Series E Preferred Units having the
designations, preferences and other rights set forth below:
(g) Series E Cumulative Preferred Units of Partnership
Interest.
1. Designation and Number. A series of Partnership Interests
designated as 7.5% Series E Cumulative Preferred Units ("Series E Preferred
Units") is hereby
established. The number of Series E Preferred Units shall be 200,000. The stated
value of a Series E Preferred Unit shall be $50.00 (the "Stated Value").
2. Rank. The Series E Preferred Units shall, with respect to
distribution rights and rights upon liquidation, dissolution or winding up of
the Partnership, rank (i) senior to the Common Units and to all Partnership
Interests ranking junior to the Series E Preferred Units and (ii) on a parity
with all Partnership Interests issued by the Partnership that constitute Parity
Preferred Units.
3. Distributions.
(1) Subject to the rights of holders of Parity Preferred
Units and holders of preferred units ranking senior to the Series E Preferred
Units issued after the date hereof in accordance herewith as to payment of
distributions and rights upon liquidation, dissolution or winding-up, the
holders of Series E Preferred Units shall be entitled to receive, when, as and
if declared by the Partnership acting through the General Partner, out of funds
legally available for that purpose, cumulative preferential distributions
payable in cash in an amount per Series E Preferred Unit equal to $0.9375 per
calendar quarter (equivalent to $3.75 per annum or an annual rate of 7.5%). Such
distributions shall be cumulative from the Issue Date (as defined in subsection
I below), whether or not in any Series E Distribution Period or Periods such
distributions shall be authorized or there shall be funds of the Partnership
legally available for the payment of such distributions, and shall be payable
quarterly in arrears on the Series E Distribution Payment Dates, commencing on
the first Series E Distribution Payment Date after the Series E Issue Date. Each
such distribution shall be payable in arrears to the holders of record of the
Series E Preferred Units, as they appear on the records of the Partnership at
the close of business on a record date which shall be not less than 10 and not
more than 60 days prior to the applicable Series E Distribution Payment Date.
Accumulated, accrued and unpaid distributions for any past Series E Distribution
Periods may be authorized and paid at any time, without reference to any regular
Series E Distribution Payment Date, to holders of record on a given date, which
date shall not precede by more than 45 days the payment date thereof, as may be
fixed by the Partnership, acting through the General Partner. The amount of
accumulated, accrued and unpaid distributions on any Series E Preferred Unit, or
fraction thereof, at any date shall be the amount of any distributions thereon
calculated at the applicable rate to and including such date, whether or not
earned or authorized, which have not been paid in cash. The amount of
distributions payable per Series E Preferred Unit for the initial Series E
Distribution Period, or any other period shorter or longer than a full Series E
Distribution Period, shall be computed ratably on the basis of four 90-day
quarters and a 360-day year.
(2) Accumulated but unpaid distributions on the Series E
Preferred Units shall accrue additional distributions at the rate of 12% per
annum. Any distribution payment made on the Series E Preferred Units shall first
be credited against the earliest accumulated but unpaid distribution due with
respect to such Series E Preferred Units which remains payable.
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(3) Except as provided in subsection C(iv) below, and for
so long as Series E Preferred Units are outstanding, no distributions (other
than in Common Units or Partnership Interests ranking junior to the Series E
Preferred Units as to distributions and upon liquidation, dissolution or winding
up of the Partnership) shall be authorized or paid or set aside for payment nor
shall any other distribution be authorized or made upon the Common Units or any
other Partnership Interests ranking, as to distributions or upon liquidation,
dissolution or winding up of the Partnership, on a parity with or junior to the
Series E Preferred Units for any period unless full cumulative distributions
have been or contemporaneously are authorized and paid or authorized and a sum
sufficient for the payment thereof set apart for such payment on the Series E
Preferred Units for all past Series E Distribution Periods and the then current
Series E Distribution Period, nor shall any Common Units, or any Partnership
Interests ranking junior to or on a parity with the Series E Preferred Units as
to distributions or upon liquidation, dissolution or winding up of the
Partnership, be redeemed, purchased or otherwise acquired for any consideration
(or any monies be paid to or made available for a sinking fund for the
redemption of any such Partnership Interests) by the Partnership or any other
entity controlled directly or indirectly by the Partnership (except by
conversion into or exchange for Partnership Interests ranking junior to the
Series E Preferred Units as to distributions and upon liquidation, dissolution
or winding up of the Partnership or for the repurchase of Common Units held by
employees, officers or consultants of the Partnership (or their permitted
transferees) that are subject to restrictive share purchase agreements under
which the Partnership has the option or obligation to repurchase such shares
upon the occurrence of certain events, such as termination of employment). The
foregoing sentence will not prohibit the redemption of Partnership Interests
corresponding to any Series E Preferred Shares or any class or series of Junior
Shares to be purchased by Xxxxxxxx Properties Trust (the "Trust") pursuant to
Article VII of the Amended and Restated Declaration of Trust (the "Trust") of
the Trust to preserve the Trust's status as a real estate investment trust.
(4) When distributions are not paid in full (or a sum
sufficient for such full payment is not so set apart) upon the Series E
Preferred Units and any other Partnership Interests ranking on a parity as to
distributions with the Series E Preferred Units, all distributions authorized
with respect to the Series E Preferred Units and any other Partnership Interests
ranking on a parity as to distributions with the Series E Preferred Units shall
be authorized pro rata so that the amount of distributions authorized with
respect to the Series E Preferred Units and such other Partnership Interests
shall in all cases bear to each other the same ratio that accumulated
distributions with respect to the Series E Preferred Units and such other
Partnership Interests (which shall not include any accumulation in respect of
unpaid distributions for prior distribution periods if such Partnership
Interests do not have a cumulative distribution) bear to each other.
(5) 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.
(6) No distributions on Series E Preferred Units shall be
declared by the General Partner or paid by the Partnership at such time as the
terms and provisions of any
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agreement of the Partnership, including any agreement relating to its
indebtedness, prohibits such declaration or payment or provides that such
declaration, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such declaration or payment shall be
restricted or prohibited by law.
4. Liquidation Preference.
(1) Subject to the rights of holders of Parity Preferred
Units and holders of preferred units ranking senior to the Series E Preferred
Units issued after the date hereof in accordance herewith with respect to rights
upon voluntary or involuntary liquidation, dissolution or winding-up of the
Partnership, upon any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Partnership, the holders of the Series E
Preferred Units shall be entitled to receive out of the assets of the
Partnership legally available for distribution to the Partners, after payment or
legally required provision for debts and other liabilities of the Partnership, a
liquidation preference equal to the Stated Value per Series E Preferred Unit,
plus an amount equal to any accumulated and unpaid distributions to the date of
payment, before any distribution of assets is made to holders of Common Units,
General Partnership Interests or any other Partnership Interests that rank
junior to the Series E Preferred Units as to liquidation rights.
(2) If upon any such voluntary or involuntary liquidation,
dissolution or winding up of the Partnership, the assets of the Partnership are
insufficient to pay the amount of such liquidating distributions on all
outstanding Series E Preferred Units and the corresponding amounts payable on
all other Partnership Interests ranking on a parity with the Series E Preferred
Units in the distribution of assets, then such assets shall be allocated among
the Series E Preferred Units, as a series, and each series of such other
Partnership Interests in proportion to the full liquidating distributions to
which they would otherwise be respectively entitled.
(3) Written notice of any such liquidation, dissolution or
winding up of the Partnership, stating the payment date or dates when, and the
place or places where, the amounts distributable in such circumstances shall be
payable, shall be given by first class mail, postage pre-paid, not less than 10
nor more than 60 days prior to the payment date stated therein, to each holder
of the Series E Preferred Units at the respective addresses of such holders as
the same shall appear on the records of the Partnership.
(4) After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series E Preferred
Units shall have no right or claim to any of the remaining assets of the
Partnership.
(5) Prior to the third (3rd) anniversary of the Series E
Issue Date, the General Partner shall not permit the Partnership to liquidate,
dissolve, wind up or otherwise consummate a transaction that would cause the
holder of the Series E Preferred Units to recognize a taxable event under
Section 1001 of the Internal Revenue Code of 1986, as amended, with respect
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to the Section 704(c) gain associated the Class E Preferred Units and the Common
Units issued pursuant to the Contribution Agreement.
5. Redemption.
(1) On and after the third (3rd) anniversary of the Series
E Issue Date, the holders of Series E Preferred Units may require the
Partnership, upon at least 30 days notice, to redeem in whole, but not in part,
the Series E Preferred Units for a redemption price per Series E Preferred Unit
payable in cash equal to the Stated Value plus an amount equal to any
accumulated and unpaid distributions to the date of redemption (the "Aggregate
Redemption Value"). Notwithstanding the forgoing, upon receipt of a redemption
notice from a holder of the Series E Preferred Units and in lieu of payment in
cash as previously provided, the General Partner or Xxxxxxxx Properties Trust, a
Maryland real estate investment trust (the "Company"), (or both) may, in its
sole and absolute discretion, elect to purchase directly and acquire such Series
E Preferred Units from the holder of such Series E Preferred Units in exchange
for the number of Common Shares of the Company obtained by dividing the
Aggregate Redemption Value by the Current Market Price on the business day
immediately preceding the redemption date, provided that the Company has filed
with the Securities Exchange Commission a registration statement covering the
resale of such Common Shares and the registration statement has been declared
effective by the Securities and Exchange Commission (the "SEC") under the
Securities Act as of the redemption date (without any stop orders), and the
Company has agreed to use its best efforts to maintain such registration
statement effective until the earlier of the date the Common Shares issue in
payment of the Aggregate Redemption Price have been resold by the holder or six
(6) months following the redemption date. The holder agrees that the Company may
extend the redemption date for up to an additional sixty (60) days as may be
deemed necessary by the Company to have the registration statement declared
effective by the SEC provided that the Company continues to use its best efforts
to have the registration statement declared effective under the Securities Act.
No fractional shares shall be issued upon redemption of the Series E Preferred
Units. Instead of any factional interest in a Common Share that would otherwise
be deliverable, the Company or the General Partner, as the case may be, shall
pay an amount in cash based upon the Current Market Price of the Common Shares
on the business day immediately preceding the redemption date. If the General
Partner or the Company exercises its purchase election and delivers Common
Shares in payment of the Aggregate Redemption Value, then the Partnership will
cause the General Partner or the Company, as the case may be, to issue to the
holder of the redeemed Class E Units additional Common Shares (collectively,
"Additional Common Shares") in the event that the holder, within thirty (30)
days following the redemption date, resells the Common Shares issued in payment
of the Aggregate Redemption Value and receives net proceeds from such sale(s) in
an aggregate amount less than the Aggregate Redemption Value (the amount of such
shortfall being referred to below as the "Shortfall"), provided that the
Partnership or the Company is notified in writing within three days of the
redemption date of the holder's intention to resell such Common Shares and/or
any Additional Common Shares and provided further that such holder reasonably
cooperates with the Partnership and the Company in any such sale, including
selling the Common Shares through such broker-dealer as the Partnership or the
Company may specify. The number of Additional Common Shares to be issued in such
circumstance
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would be calculated by dividing the dollar amount of the Shortfall by the
Current Market Price on the date of the last sale of the Common Shares issued in
payment of the Aggregate Redemption Value, and the Partnership agrees to use
best efforts to cause the Company to register under the Securities Act the
resale of such Additional Common Shares and to maintain such registration
statement effective until the earlier of the date the Additional Common Shares
have been resold by the holder or six (6) months following the date of their
issuance.
(2) Unless full cumulative distributions on all
outstanding Series E Preferred Units have been or contemporaneously are
authorized and paid or authorized and a sum sufficient for the payment thereof
set apart for payment for all past distributions periods and the then current
distribution period, the Partnership shall not purchase or otherwise acquire
directly or indirectly any Partnership Interests ranking junior to or on a
parity with the Series E Preferred Units as to distributions or upon
liquidation, dissolution or winding up of the Partnership; provided that the
foregoing restriction on purchases and acquisitions shall apply only to
purchases and acquisitions of Partnership Interests held by any of the Company,
the General Partner, any direct or indirect subsidiary of the Company or the
General Partner or any of Messrs. Xxxxxxxx, August or XxXxxx.
(3) On or after the redemption date, each holder of
Series E Preferred Units to be redeemed shall present and surrender the
certificates evidencing its Series E Preferred Units to the Partnership at the
place designated by the Partnership and thereupon the redemption price of such
Series E Preferred Units shall be paid or the Company shall issue a certificate
or certificates for the number of full Common Shares issuable upon redemption of
the Series E Preferred Units, as the case may be, to or on the order of the
person whose name appears on such certificate evidencing Series E Preferred
Units as the owner thereof and each surrendered certificate shall be canceled.
(4) From and after the redemption date (unless the
Partnership defaults in payment of the redemption price), all distributions on
the Series E Preferred Units shall cease to accumulate and all rights of the
holders thereof, except the right to receive the redemption price thereof
(including all accumulated and unpaid distributions up to the redemption date),
shall cease and terminate and such Series E Preferred Units shall not be deemed
to be outstanding for any purpose whatsoever.
6. Voting Rights.
(1) Holders of the Series E Preferred Units shall not
have any voting rights.
(2) So long as any Series E Preferred Units remain
outstanding, the Partnership shall not, without the affirmative vote or consent
of the holders of at least two-thirds of Series E Preferred Units outstanding at
the time, given in person or by proxy, either in writing or at a meeting, (a)
authorize or create, or increase the authorized or issued amount of, any class
or series of Partnership Interests ranking prior to Series E Preferred Units
with respect to the payment
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of distributions or the distribution of assets upon voluntary or involuntary
liquidation, dissolution or winding up of the Partnership or reclassify any
previously designated Partnership Interests into such Partnership Interests, or
create, authorize or issue any obligation or Partnership Interests convertible
or exchangeable into or evidencing the right to purchase any such Partnership
Interests; or (b) amend, alter or repeal the provisions of the Partnership
Agreement, whether by merger, consolidation or otherwise, or consummate a merger
or consolidation involving the Partnership (any such merger or consolidation, an
"Event"), so as to materially and adversely affect any right, preference,
privilege or voting power of such Series E Preferred Units or the holders
thereof; provided, however, with respect to the occurrence of any of the Events
set forth in (b) above, the occurrence of any such Event shall not be deemed to
materially adversely affect such rights, preferences, privileges or voting
powers of holders of Series E Preferred Units if immediately after any such
Event (i) in which the Partnership is the surviving entity, there are
outstanding no Partnership Interests ranking as to distribution rights or
liquidation preference senior to the Series E Preferred Units other than the
securities of the Partnership outstanding prior to such Event, (ii) in which the
Partnership is not the surviving entity, as a result of the Event, the holders
of the Series E Preferred Units receive limited partnership interests with
preferences, rights and privileges substantially similar to the preferences,
rights and privileges of the Series E Preferred Units and there are outstanding
no limited partnership interests of the surviving entity ranking as to
distribution rights or liquidation preference senior to the Series E Preferred
Units other than the securities issued in respect of Partnership Interests
outstanding prior to such Event or (iii) whether or not the Partnership is the
surviving entity, there are no outstanding equity securities of the Partnership
or its successor (other than securities of the Partnership outstanding prior to
such Event, or securities issued in respect of securities of the Partnership
outstanding prior to such Event) ranking as to distribution rights or
liquidation preference senior to the Series E Preferred Units.
7. Allocations. Allocations of the Partnership's items of
income, gain, loss and deduction shall be allocated among holders of Series E
Preferred Units in accordance with Article V of the Partnership Agreement.
8. Transfers. The Series E Preferred Units shall be subject to
the transfer provisions of Article IX of the Partnership Agreement (captioned
Transfer of Limited Partnership Interests); provided that Brandywine may
transfer all or any of the Series E Preferred Units to one or more Affiliates so
long as such transferee-Affiliates remain subject to the restrictions in Article
IX.
9. Definitions.
"Current Market Price" shall mean for any day, the last reported
sales price on such day, or, if no sale takes place on such day, the average of
the reported closing bid and asked prices on such day, in either case as
reported on the New York Stock Exchange or, if such security is not listed or
admitted for trading on the NYSE, on the principal national securities exchange
on which such security is listed or admitted for trading or, if not listed or
admitted for trading on any national securities exchange, on the Nasdaq National
Market ("NASDAQ") or, if such security is not quoted on NASDAQ, the average of
the closing bid and asked prices on such day in the over-the-counter
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market as reported by the National Association of Securities Dealers, Inc. (the
"NASD") or, if bid and asked prices for such security on such day shall not have
been reported through the NASD, the average of the bid and asked prices on such
day as furnished by any NYSE member firm regularly making a market in such
security selected for such purpose by the Board of Trustees of the Company.
"Series E Distribution Payment Date" shall mean, with respect to
each Series E Distribution Period, the fifteenth day of January, April, July and
October in each year, commencing, on July 15, 2001; provided, however, that if
any Series E Distribution Payment Date falls on any day other than a business
day, the distribution payment due on such Series E Distribution Payment Date
shall be paid on the business day immediately following such Series E
Distribution Payment Date.
"Series E Distribution Periods" shall mean quarterly distribution
periods commencing on the fifteenth day of each January, April, July and October
of each year and ending on and including the day preceding the first day of the
next succeeding Series E Distribution Period (other than the initial Series E
Distribution Period, which shall commence on the Issue Date and end on and
include July 14, 2001).
"Series E Issue Date" shall mean the date on which Series E
Preferred Units are first issued by the Partnership.
2. In accordance with the Partnership Agreement and the
Contribution Agreement, the Partnership hereby issues to Brandywine _______
Common Units and represents and warrants that, except as provided below, each
such Common Unit has the same rights and entitlements as all other Common Units
outstanding on the date hereof, provided that the distributions declared by the
Partnership on the _____ Common Units during the initial calendar quarter in
which such Common Units are issued shall be pro rated by the Partnership based
on the number of days such Common Units are outstanding during such quarter.
Brandywine (and any subsequent transferee of the _____ Common Units issued to
Brandywine on the date hereof) shall not have the right to exercise the Exchange
Right prior to the second (2nd) anniversary of the date on which the _____
Common Units are first issued, and may exercise the Exchange Right only for all
and not less than all of the _____ Common Units. The Company shall file with the
Securities and Exchange Commission a registration statement covering the resale
of the Common Shares received upon exercise by Brandywine of the Exchange Right
and use its best efforts to have the registration statement declared effective
under the Securities Act, all in accordance with and as provided in SECTION 8.06
of the Xxxxxxxx Partnership Agreement. The limitations in SECTION 8.05(c) of the
Partnership Agreement and in the proviso in SECTION 8.05(d) shall not apply to
the exercise by the holder of the _____ Common Units issued to Brandywine.
3. All items of taxable income or gain that are allocated to the
Partnership by the Tysons Partnership (as defined in the Contribution Agreement)
pursuant to Section 704(c) of the Code, as well as any items of taxable income
or gain recognized by the Partnership in respect of the Tysons Partnership shall
be allocated to Brandywine for federal income tax purposes pursuant to
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Section 704(c) of the Code and the principles of Treas. Reg. Section
1.704-3(a)(9) and Brandywine covenants to file its federal income tax return in
a manner consistent with the foregoing. Furthermore, Brandywine will be
allocated an amount of income equal to any gain recognized by the Partnership
upon the lapse of the Brandywine "bottom guaranty" of the $16.2 million Mass
Mutual loan on January 5, 2004.
4. The Partnership Agreement is hereby amended to reflect the
admission as a Limited Partner on the date hereof of Brandywine and the
ownership by Brandywine of the Series E Preferred Units and of _____ Common
Units, and Exhibit A to the Partnership Agreement is hereby amended and restated
in its entirety as set forth on EXHIBIT A attached hereto.
5. Except as expressly set forth in this Fourteenth Amendment to
the Partnership Agreement, the Partnership Agreement is hereby ratified and
confirmed in each and every respect. Brandywine hereby acknowledges that the
General Partner intends to amend and restate the Partnership Agreement in its
entirety pursuant to Article XI of the Partnership Agreement to incorporate the
provisions and revisions contemplated by each amendment to the Partnership
Agreement including the Fourteenth Amendment (the "Third Restatement") and to
clarify other provisions of the Partnership Agreement, and Brandywine hereby
consents to the Third Restatement in substantially the form provided to
Brandywine on the date hereof.
IN WITNESS WHEREOF, this Amendment to the Partnership
Agreement has been executed and delivered as of the date first above written.
GENERAL PARTNER:
XXXXXXXX PROPERTIES I, INC.
By:
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Name
Its: President and Chief Executive Officer
ADMITTED PARTNER:
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