EXHIBIT 4.1
NINTH AMENDMENT TO
FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
XXXXXXX X. XXXXX RESIDENTIAL REALTY L.P.
THIS NINTH AMENDMENT TO FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF XXXXXXX X. XXXXX RESIDENTIAL REALTY L.P. (this "Ninth
Amendment"), dated as of June 30, 1997, is entered into by Xxxxxxx X. Xxxxx
Residential Realty, Inc., a Maryland corporation, as general partner (the
"General Partner") of Xxxxxxx X. Xxxxx Residential Realty L.P. (the
"Partnership"), for itself and on behalf of the limited partners of the
Partnership.
WHEREAS, Section 4.2.B of the First Amended and Restated Agreement of
Limited Partnership of the Partnership (as heretofore amended, the "Partnership
Agreement") provides that the General Partner shall not issue additional
convertible securities containing the right to subscribe for or purchase shares
of Common Stock of the General Partner ("REIT Shares" and collectively, the "New
Securities"), other than to all holders of REIT Shares, unless the General
Partner causes the Partnership to issue to the General Partner Partnership
Interests having designations, preferences and other rights, all such that the
economic interests are substantially the same as those of the New Securities;
WHEREAS, the General Partner has entered into a Series A Cumulative
Convertible Redeemable Preferred Share Purchase Agreement dated as of May, 15,
1997, pursuant to which the General Partner has agreed to issue shares of a
newly created series of capital stock, designated Series A Cumulative
Convertible Redeemable Preferred Stock (the "Series A Preferred Stock");
WHEREAS, pursuant to the authority granted to the General Partner
pursuant to Section 4.2 of the Partnership Agreement, the General Partner
desires to amend the Partnership Agreement (i) to establish a new class of
Units, to be entitled Series A Cumulative Convertible Redeemable Preferred Units
(the "Series A Preferred Units"), and to set forth the designations, rights,
powers, preferences and duties of such Series A Preferred Units, which are
substantially the same as those of the Series A Preferred Stock, and (ii) to
make certain other changes to the Partnership Agreement;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the General Partner hereby amends the Partnership Agreement, as
follows:
1. Article I of the Partnership Agreement is hereby amended to add the
following definitions:
"Common Unit" means a Partnership Unit that is not a Preferred
Unit. The Class A Units and Class B Units are Common Units.
"Common Unit Available Cash" has the meaning set forth in Section
5.1.B.
"Liquidation Preference Amount" means, with respect to any
Preferred Unit as of any date of determination, the amount (including
accrued and unpaid distributions to the date of determination) payable
with respect to such Preferred Unit (as established by the instrument
designating such Preferred Unit) upon the voluntary or involuntary
dissolution or winding up of the Partnership as a preference over
distributions to Units ranking junior to such Preferred Unit.
"Preferred Unit" means any Partnership Unit issued from time to
time pursuant to Section 4.2 hereof that is specifically designated by
the General Partner at the time of its issuance as a Preferred Unit.
Each class or series of Preferred Units shall have such designations,
preferences, and relative, participating, optional, or other special
rights, powers, and duties, including rights, powers, and duties senior
to the Common Units, all as determined by the General Partner, subject to
compliance with the requirements of Section 4.2 hereof.
In addition, the definitions of "Partnership Unit," "Percentage Interest," and
"REIT Shares Amount" appearing in Article 1 of the Partnership Agreement are
hereby deleted in their entirety and the following definitions are inserted in
their place:
"Partnership Unit" means a fractional undivided share of a class
or series of Partnership Interests. The ownership of Partnership Units
shall be evidenced by such form of certificate as the General Partner may
adopt from time to time on behalf of the Partnership. Without limitation
on the authority of the General Partner as set forth in Section 4.2
hereof (but subject to the limitations thereof), the General Partner may
designate any Partnership Units, when issued, as Common Units or as
Preferred Units, may establish any other class of Partnership Units, and
may designate one or more series of any class of Partnership Units.
"Percentage Interest" means, as to a Partner, with respect to any
class or series of Partnership Units held by such Partner, its interest
in such class or series of Partnership Units as determined by dividing
the number of Partnership Units in such class or series owned by such
Partner by the total number of Partnership Units in such class or series
then outstanding. For purposes of determining the rights and
relationships among the various classes and series of Partnership Units,
Preferred Units shall not be considered to have any share of the
aggregate Percentage Interest in the Partnership unless, and only to the
extent, provided otherwise in the instrument creating such class or
series of Preferred Units.
"REIT Shares Amount" means a number of REIT Shares equal to the
product of the number of Common Units offered for redemption by a
Redeeming Partner, multiplied by the Conversion Factor; provided that in
the event the General Partner issues to all holders of REIT Shares
rights, options, warrants or convertible or exchangeable securities
entitling the
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shareholders to subscribe for or purchase REIT Shares, or any other
securities or property (collectively, the "rights"), then the REIT Shares
Amount shall also include such rights that a holder of that number of
REIT Shares would be entitled to receive.
2. Section 4.2 of the Partnership Agreement is hereby amended by adding
after Section 4.2.C the following section:
D. Series A Preferred Units. Under the authority granted to it
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by Section 4.2.A hereof, the General Partner hereby establishes an
additional class of Partnership Units entitled "Series A Cumulative
Convertible Redeemable Preferred Units" (the "Series A Preferred Units").
Series A Preferred Units shall have the designations, preferences,
rights, powers and duties as set forth in Exhibit F hereto.
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3. Section 5.1 of the Partnership Agreement is hereby amended and
restated in its entirety as follows:
Section 5.1 Requirement and Characterization of Distributions
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A. The General Partner shall distribute at least quarterly an
amount equal to 100% of Available Cash generated by the Partnership during
such quarter or shorter period to the Partners who are Partners on the
Partnership Record Date with respect to such quarter or shorter period in
the following order of priority:
(i) First, to the holders of Preferred Units in such amount as is
required for the Partnership to pay all distributions with
respect to such Preferred Units due or payable in accordance with
the instruments designating such Preferred Units through the last
day of such quarter or shorter period; such distributions shall
be made to such Partners in such order of priority and with such
preferences as have been established with respect to such
Preferred Units as of the last day of such calendar quarter or
shorter period; and then
(ii) To the Partners in proportion to their respective Percentage
Interests in the Common Units on such Partnership Record Date,
subject to the provisions of Section 5.1.B and 5.1.C;
provided that in no event may a Partner receive a distribution of Available
Cash with respect to a Partnership Unit if such Partner is entitled to
receive a distribution out of such Available Cash with respect to a REIT
Share for which such Partnership Unit has been redeemed or exchanged. The
General Partner shall take such reasonable efforts, as determined by it in
its sole and absolute discretion and consistent with its qualification as a
REIT, to distribute Available Cash to the Limited Partners so as to
preclude any such distribution or portion thereof from being treated as
part of a sale of property to the Partnership by a
3
Limited Partner under Section 707 of the Code or the Regulations
thereunder; provided that the General Partner and the Partnership shall not
have liability to a Limited Partner under any circumstances as a result of
any distribution to a Limited Partner being so treated.
B. If for any quarter or shorter period with respect to which a
distribution is to be made (a "Distribution Period") Class B Units are
outstanding on the Partnership Record Date for such Distribution Period,
the General Partner shall allocate the Available Cash with respect to such
Distribution Period available after distributions to all Preferred Units
("Common Unit Available Cash") between the Partners who are holders of
Class A Units ("Class A") and the Partners who are holders of Class B Units
("Class B") as follows:
1) Class A shall receive that portion of the Common Unit
Available Cash (the "Class A Share") determined by multiplying the
amount of Available Cash by the following fraction:
A x Y
-----------------
(A x Y)+(B x X)
2) Class B shall receive that portion of the Common Unit
Available Cash (the "Class B Share") determined by multiplying the
amount of Available Cash by the following fraction:
B x X
-------------------
(A x Y)+(B x X)
3) For purposes of the foregoing formulas, (i) "A" equals the
number of Class A Units outstanding on the Partnership Record Date for
such Distribution Period; (ii) "B" equals the number of Class B Units
outstanding on the Partnership Record Date for such Distribution
Period; (iii) "Y" equals the number of days in the Distribution
Period; and (iv) "X" equals the number of days in the Distribution
Period for which the Class B Units were issued and outstanding.
The Class A Share shall be distributed among Partners holding Class A
Units on the Partnership Record Date for the Distribution Period in
accordance with the number of Class A Units held by each Partner on such
Partnership Record Date; provided that in no event may a Partner receive a
distribution of Available Cash with respect to a Class A Unit if a Partner
is entitled to receive a distribution out of such Available Cash with
respect to a REIT Share for which such Class A Unit has been redeemed or
exchanged. The Class B Share shall be distributed among the Partners
holding Class B Units on the Partnership Record Date for the Distribution
Period in accordance with the number of Class B Units held by each Partner
on such Partnership Record Date. In no event shall any Class B Units be
entitled to receive any distribution of Available Cash for any Distribution
Period ending prior to the date on which such Class B Units are issued.
4
C. In the event that Class B Units which have been issued on
different dates are outstanding on the Partnership Record Date for any
Distribution Period, then the Class B Units issued on each particular date
shall be treated as a separate series of Common Units for purposes of
making the allocation of Common Unit Available Cash for such Distribution
Period among the holders of Common Units (and the formula for making such
allocation, and the definitions of variables used therein, shall be
modified accordingly). Thus, for example, if two series of Class B Units
are outstanding on the Partnership Record Date for any Distribution Period,
the allocation formula for each series, "Series B\\1\\" and "Series
B\\2\\," would be as follows:
1) Series B\\1\\ shall receive that portion of the Common Unit
Available Cash determined by multiplying the amount of Common Unit
Available Cash by the following fraction:
B\\1\\ x X\\1\\
-------------------------------------------
(A x Y)+(B\\1\\ x X\\1\\)+(B\\2\\ x X\\2\\)
2) Series B\\2\\ shall receive that portion of the Common Unit
Available Cash determined by multiplying the amount of Common Unit
Available Cash by the following fraction:
B\\2\\ x X\\2\\
-------------------------------------------
(A x Y)+(B\\1\\ x X\\1\\)+(B\\2\\ x X\\2\\)
3) For purposes of the foregoing formulas the definitions set
forth in Section 5.1.B.3 remain the same except that (i) "B\\1\\"
equals the number of Common Units in Series B\\1\\ outstanding on the
Partnership Record Date for such Distribution Period; (ii) "B\\2\\"
equals the number of Common Units in Series B\\2\\ outstanding on the
Partnership Record Date for such Distribution Period; (iii) "X\\1\\"
equals the number of days in the Distribution Period for which the
Partnership Units in Series B\\1\\ were issued and outstanding; and
(iv) "X\\2\\" equals the number of days in the Distribution Period for
which the Common Units in Series B\\2\\ were issued and outstanding.
D. Notwithstanding anything to the contrary contained herein, in
no event shall a Partner receive a distribution of Available Cash with
respect to any Common Unit with respect to any quarter or shorter period
until such time as the Partnership has distributed to the holders of
Preferred Units an amount sufficient to pay all distributions payable with
respect to such Preferred Units through the last day of such quarter or
shorter period, in accordance with the instruments designating such
Preferred Units.
4. Section 6.1 of the Partnership Agreement is hereby amended and
restated in its entirety as follows:
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6.1 Allocations For Capital Account Purposes
----------------------------------------
For purposes of maintaining the Capital Accounts and in determining
the rights of the Partners among themselves, the Partnership's items of
income, gain, loss and deduction (computed in accordance with Exhibit B
hereof) shall be allocated among the Partners in each taxable year (or
portion thereof) as provided herein below.
A. Net Income. After giving effect to the special allocations set
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forth in Section 1 of Exhibit C (including Subparagraph F thereof
regarding the allocation of income to holders of Preferred Units), Net
Income shall be allocated in the following manner and order of priority:
(1) To the General Partner until the cumulative allocations of Net
Income under this Section 6.1.A(1) equal the cumulative Net Losses
allocated to the General Partner under Section 6.1.B(3) hereof.
(2) To those Partners who have received allocations of Net Loss
under Section 6.1.B(2) hereof until the cumulative allocations of Net
Income under this Section 6.1.A(2) equal such cumulative allocations of
Net Loss (such allocation of Net Income to be in proportion to the
cumulative allocations of Net Loss under such section to each such
Partner).
(3) To the Partners until the cumulative allocations of Net Income
under this Section 6.1.A(3) equal the cumulative allocations of Net Loss
to such Partners under Section 6.1.B.(1) hereof (such allocation of Net
Income to be in proportion to the cumulative allocations of Net Loss
under such section to each such Partner).
(4) Any remaining Net Income shall be allocated to the Partners who
hold Common Units in proportion to their respective Percentage Interests
as holders of Common Units.
B. Net Losses. After giving effect to the special allocations set
----------
forth in Section 1 of Exhibit C, Net Losses shall be allocated to the
Partners as follows:
(1) To the Partners who hold Common Units in accordance with their
respective Percentage Interests as holders of Common Units, except as
otherwise provided in this Section 6.1.B.
(2) To the extent that an allocation of Net Loss under Section
6.1.B(1) would cause a Partner to have an Adjusted Capital Account
Deficit at the end of such taxable year (or increase any existing
Adjusted Capital Account Deficit of such Partner), such Net Loss shall
instead be allocated to those Partners, if any, for whom such allocation
of Net Loss would not cause or increase an Adjusted Capital Account
Deficit. Solely for purposes of this Section 6.1.B(2), the Adjusted
Capital Account Deficit, in the case of the
6
General Partner, shall be determined without regard to the amount
credited to the General Partner's Capital Account for the aggregate
Liquidation Preference Amount attributable to the General Partner's
Preferred Units. The Net Loss allocated under this Section 6.1.B(2) shall
be allocated among the Partners who may receive such allocation in
proportion to and to the extent of the respective amounts of Net Loss
that could be allocated to such Partners without causing such Partners to
have an Adjusted Capital Account Deficit.
(3) Any remaining Net Loss shall be allocated to the General
Partner.
5. Section 8.6 of the Partnership Agreement is hereby amended by adding
new paragraphs 8.6.E and 8.6.F immediately following Section 8.6.D, as follows:
E. Notwithstanding anything contained in Sections 8.6.A, 8.6.B,
8.6.C, or 8.6.D, no Partner shall be entitled to exercise the Redemption
Right pursuant to Section 8.6.A with respect to any Preferred Unit unless
(i) such Preferred Unit has been issued to and is held by a Partner other
than the General Partner, and (ii) the General Partner has expressly
granted to such Partner the right to redeem such Preferred Units pursuant
to Section 8.6.A.
F. Preferred Units shall be redeemed, if at all, only in
accordance with such redemption rights or options, as are set forth with
respect to such Preferred Units (or class or series thereof) in the
instruments designating such Preferred Units (or class or series
thereof).
6. Exhibit C to the Partnership Agreement is hereby amended to add new
Section 1.F. as follows and existing Section 1.F. shall be redesignated as
Section 1.G:
F. Priority Allocation With Respect to Preferred Units. Any
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remaining items of Partnership gross income or gain for the Partnership
Year, if any, shall be specially allocated to the General Partner or any
other Partner that holds Preferred Units in an amount equal to the
excess, if any, of the cumulative distributions received by such Partner
for the current Partnership Year and all prior Partnership Years (other
than distributions that are treated as being in satisfaction of the
Liquidation Preference Amount for any Preferred Units held by such
Partner or amounts paid in redemption of any Preferred Units, except to
the extent that the Liquidation Preference Amount or amount paid in
redemption includes accrued and unpaid distributions) over the cumulative
allocations of Partnership gross income and gain to such Partner under
this Section 1.F for all prior Partnership Years.
7. Exhibits to Partnership Agreement.
---------------------------------
A. The General Partner shall maintain the information set forth in
Exhibit A to the Partnership Agreement, as such information shall change from
time to time, in such
7
form as the General Partner deems appropriate for the conduct of the
Partnership's affairs, and Exhibit A shall be deemed amended from time to time
to reflect the information so maintained by the General Partner, whether or not
a formal amendment to the Partnership Agreement has been executed amending such
Exhibit A. In addition to the designation of Series A Preferred Units pursuant
to this Ninth Amendment, such information shall reflect (and Exhibit A shall be
deemed amended from time to time to reflect) the issuance of any additional
Partnership Units to the General Partner or any other Person, the transfer of
Partnership Units and the redemption of any Partnership Units, all as
contemplated herein.
B. The Partnership Agreement is hereby amended by attaching
thereto as Exhibit F the Exhibit F attached hereto.
8. General Amendments to Partnership Agreement.
-------------------------------------------
(A) Notwithstanding anything in the Partnership Agreement or this
Ninth Amendment, all references to Partnership Units in the definition of "Class
A Unit" and Sections 11.2.C of the Partnership Agreement shall be deemed to
refer solely to Common Units, and not to Preferred Units. The references to
Limited Partnership Units and Limited Partnership Interests in Section 7.3.B of
the Partnership Agreement shall be deemed to refer only to Common Units held by
Limited Partners (or the Common Units that are part of the Limited Partner
Interest of the General Partner).
(B) In addition, references to Partnership Units in the definition
of "Cash Amount" and Sections 7.4.D, 7.5.B, 7.5.C, and 8.6 of the Partnership
Agreement shall be deemed to refer solely to Class A Units.
(C) The reference to Percentage Interests in the last sentence of
Section 4.2.A of the Partnership Agreement shall be deemed to refer to
Percentage Interests in the applicable class or series of Partnership Interests.
(D) Further, the reference to Partnership Interests appearing in
Sections 14.1.A and 14.2.A of the Partnership Agreement shall be deemed to refer
only to Partnership Interests held with respect to Common Units. The references
in Sections 14.1.A, 14.1.D, and 14.2.A of the Partnership Agreement to
Percentage Interests of the Limited Partners and Limited Partner Interests (or
Limited Partnership Interests) held by the General Partner shall be deemed to
refer only to Percentage Interests in Common Units held by Limited Partners or
Common Units that are included in the Limited Partner Interest of the General
Partner, as the case may be. The references in Section 14.1.D of the
Partnership Agreement to Percentage Interests of the Partners shall be deemed to
refer solely to the Percentage Interests in Common Units of each Partner.
(E) The parenthetical phrase in the second sentence of Section 11.5
of the Partnership Agreement shall be revised to read as follows: "(such
Partnership Units being deemed to have been voted on such matter in the same
proportion as all other Partnership Units of the same class or series held by
Limited Partners are voted, to the extent that such Partnership Units are
entitled to vote on such matter)."
8
(F) The references in Section 11.6 of the Partnership Agreement to
redemption of Partnership Units or Partnership Interests "under Section 8.6" or
"pursuant to Section 8.6" shall also be deemed to refer to redemption under the
instrument designating the rights of any series or class of Preferred Units.
(G) The reference to Partnership Units in Exhibit E to the
Partnership Agreement shall be deemed to refer solely to Common Units.
9. Certain Capitalized Terms. All capitalized terms used in this Ninth
-------------------------
Amendment and not otherwise defined shall have the meanings assigned in the
Partnership Agreement. 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.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
9
IN WITNESS WHEREOF, the undersigned has executed this Ninth Amendment as
of the date first set forth above.
XXXXXXX X. XXXXX RESIDENTIAL REALTY, INC.,
as General Partner of
Xxxxxxx X. Xxxxx Residential Realty L.P.
and on behalf of existing Limited Partners
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
------------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
----------------------------------------
Title: President
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10
EXHIBIT F
DESIGNATION OF THE PREFERENCES, CONVERSION
AND OTHER RIGHTS, VOTING POWERS, RESTRICTIONS, LIMITATIONS
AS TO SERIES A PREFERRED UNITS
The Series A Preferred Units shall have the following designations,
preferences, rights, powers and duties:
(1) Certain Defined Terms. The following capitalized terms used in this
---------------------
Exhibit F shall have the respective meanings set forth below:
"Distribution Date" means (i) for any Distribution Period with respect to
which the Partnership pays a distribution on the Class A Units, the date on
which such distribution is paid, or (ii) for any Distribution Period with
respect to which the Partnership does not pay a distribution on the Class A
Units, the date set by the General Partner for payment of dividends on the
Series A Preferred Stock.
"Distribution Period" means quarterly periods commencing on January 1,
April 1, July 1 and October 1 of each year and ending on and including the
day preceding the first day of the next succeeding Distribution Period (other
than the initial Distribution Period, which shall commence and end on June
30, 1997, and other than the Distribution Period during which any Series A
Preferred Units shall be redeemed pursuant to Section 4, which shall end on
and include the date of such redemption.
"Fully Junior Units" shall mean the Common Units and any other class or
series of Partnership Units now or hereafter issued and outstanding over
which the Series A Preferred Units have a preference or priority in both (i)
the payment of dividends and (ii) the distribution of assets on any
liquidation, dissolution or winding up of the Partnership.
"Junior Units" shall mean the Common Units and any other class or series
of Partnership Units now or hereafter issued and outstanding over which the
Series0 A Preferred Units have a preference or priority in the payment of
dividends or in the distribution of assets on any liquidation, dissolution or
winding up of the Partnership.
"Parity Units" has the meaning ascribed thereto in Section 5(B).
(2) Distributions.
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(A) The General Partner, in its capacity as the holder of the then
outstanding Series A Preferred Units, shall be entitled to receive out of
funds legally available therefor, when, as and if declared by the General
Partner, distributions payable in cash at the rate per Series A Preferred
Unit equal to the greater of (a) $2.02 per annum, prorated as described in
Section 2(B), or (b)
F-1
the ordinary cash distributions (determined on each Distribution Date) paid
on the number of Class A Units, or portion thereof, into which a Series A
Preferred Unit is convertible. The distributions referred to in clause (b) of
the preceding sentence shall equal the number of Class A Units, or portion
thereof, into which a Series A Preferred Unit is convertible, multiplied by
the most recent quarterly distribution on a Class A Unit on or before the
applicable Distribution Date. If the Partnership pays an ordinary cash
distribution on the Class A Units with respect to a Distribution Period after
the date on which the Distribution Date is declared pursuant to clause (ii)
of the definition of Distribution Date and the distribution calculated with
respect to clause (b) of the first sentence of this Section 2(A) is greater
than the distribution previously declared on the Series A Preferred Units
with respect to such Distribution Period, the Partnership shall pay an
additional distribution in respect of the Series A Preferred Units on the
date on which the distribution on the Class A Units is paid, in an amount
equal to the difference between (y) the distribution calculated pursuant to
clause (b) of the first sentence of this Section 2(A) and (z) the amount of
distributions previously declared on the Series A Preferred Units with
respect to such Distribution Period. Distributions shall begin to accrue and
shall be fully cumulative from June 30, 1997, whether or not in any
Distribution Period or Periods there shall be funds of the Partnership
legally available for the payment of such distributions, and shall be payable
quarterly, when, as and if declared by the General Partner, in arrears on
each Distribution Date. Accrued and unpaid distributions for any past
Distribution Periods may be declared and paid at any time and for such
interim periods, without reference to any regular Distribution Date, to the
General Partner, on such date as may be fixed by the General Partner for
payment of the corresponding dividend on the Series A Preferred Stock. Any
distribution made on the Series A Preferred Units shall first be credited
against the earliest accrued but unpaid distribution due with respect to
Series A Preferred Units which remains payable.
(B) The amount of distributions referred to in clause (a) of the first
sentence of Section 2(A) shall be equal to $0.505. The distribution for the
initial Distribution Period will include a distribution for a single day
(i.e., June 30, 1997). The amount of distribution for such initial
Distribution Period and any other Distribution Period on the Series A
Preferred Units that represents less than a full quarter of a year shall be
computed on the basis of a 360-day year of twelve 30-day months and the
actual number of days in such Distribution Period. No interest, or sum of
money in lieu of interest, shall be payable in respect of any distribution
payment or payments on the Series A Preferred Units that may be in arrears.
(C) So long as any Series A Preferred Units are outstanding, no
distributions, except as described in the immediately following sentence,
shall be declared or paid or set apart for payment on any class or series
Parity Units for any period unless full cumulative distributions have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for such payment on the Series A Preferred
Units for all Distribution Periods terminating on or prior to the
distribution payment
F-2
date for such class or series of Parity Units. When distributions are not
paid full or a sum sufficient for such payment is not set apart, as
aforesaid, all distributions declared upon Series A Preferred Units and all
distributions declared upon any other class or series of Parity Units shall
be declared ratably in proportion to the respective amounts of distributions
accumulated and unpaid on the Series A Preferred Units and accumulated and
unpaid on such Parity Units.
(D) So long as any Series A Preferred Units are outstanding, no
distributions (other than distributions paid solely in Fully Junior Units or
options, warrants or rights to subscribe for or purchase Fully Junior Units)
shall be declared or paid or set apart for payment or other distribution
shall be declared or made or set apart for payment upon Junior Units, nor
shall any Junior Units be redeemed, purchased or otherwise acquired (other
than a redemption, purchase or other acquisition of Class A Units made for
purposes of an employee incentive or benefit plan of the General Partner or
any subsidiary) for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any such Junior Units) by
the Partnership, directly or indirectly (except by conversion into or
exchange for Fully Junior Units), unless in each case (i) the full cumulative
distributions on all outstanding Series A Preferred Units and any other
Parity Units of the Partnership shall have been paid or declared and set
apart for payment for all past Distribution Periods with respect to the
Series A Preferred Units and all past distribution periods with respect to
such Parity Units and (ii) sufficient funds shall have been paid or set apart
for the payment of the distribution for the current Distribution Period with
respect to the Series A Preferred Units and the current distribution period
with respect to such Parity Units.
(E) No distributions on the Series A Preferred Units shall be declared
by the General Partner or paid or set apart for payment by the Partnership at
such time as the terms and provisions of any agreement of the General Partner
or the Partnership, including any agreement relating to indebtedness of
either of them, prohibits such declaration, payment, or setting apart for
payment or provides that such declaration, payment or setting apart for
payment would constitute a breach thereof or a default thereunder, or if such
declaration or payment shall be restricted or prohibited by law.
(3) Liquidation Preference.
----------------------
(A) In the event of any liquidation, dissolution or winding up of
the Partnership, whether voluntary or involuntary, before any payment or
distribution of the assets of the Partnership shall be made to or set apart
for the holders of Junior Units, the General Partner, in its capacity as
holder of the Series A Preferred Units, shall be entitled to receive Twenty
Seven Dollars and Eight Cents ($27.08) (the "Series A Liquidation
Preference") per Series A Preferred Unit plus an amount equal to all
distributions (whether or not earned or declared) accrued and unpaid thereon
to the date of final distribution to the General Partner, in its
F-3
capacity as such holder; but the General Partner, in its capacity as the
holder of Series A Preferred Units shall not be entitled to any further
payment; provided that the distribution payable with respect to the
Distribution Period containing the date of final distribution shall be equal
to the greater of (i) the distribution provided in clause (a) of the first
sentence of Section 2(A) or (ii) the distribution determined pursuant to
clause (b) of the first sentence of Section 2(A) for the preceding
Distribution Period. If, upon any such liquidation, dissolution or winding up
of the Partnership, the assets of the Partnership, or proceeds thereof,
distributable to the General Partner, in its capacity as the holder of Series
A Preferred Units, shall be insufficient to pay in full the preferential
amount aforesaid and liquidating payments on any other class or series of
Parity Units, then such assets, or the proceeds thereof, shall be distributed
among the General Partner, in its capacity as the holder of such Series A
Preferred Units, and the holders of such other Parity Units ratably in
accordance with the respective amounts that would be payable on such Series A
Preferred Units and such other Parity Units if all amounts payable thereon
were paid in full. For the purposes of this Section 3, (x) a consolidation or
merger of the Partnership with one or more partnerships, limited liability
companies, corporations, real estate investment trusts or other entities and
(y) a sale, lease or conveyance of all or substantially all of the
Partnership's property or business shall not be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary, of the Partnership.
(B) Subject to the rights of the holders of Partnership Units of
any series or class ranking on a parity with or prior to the Series A
Preferred Units upon any liquidation, dissolution or winding up of the
Partnership, after payment shall have been made in full to the General
Partner, in its capacity as the holder of the Series A Preferred Units, as
provided in this Section 3, any other series or class or classes of Junior
Units shall, subject to any respective terms and provisions applying thereto,
be entitled to receive any and all assets remaining to be paid or
distributed, and the General Partner, in its capacity as the holder of the
Series A Preferred Units, shall not be entitled to share therein.
4. Redemption Right.
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(A) Except as provided in Section 4(B), the Series A Preferred
Units shall not be redeemable prior to May 15, 2003. On and after May 15,
2003, the General Partner may cause the Partnership to redeem the Series A
Preferred Units, in whole or in part, (x) for Class A Units, subject to the
conditions set forth in paragraph (i) below, or (y) for cash in an amount per
Series A Preferred Unit equal to the Series A Liquidation Preference plus
accrued and unpaid distributions (the "Redemption Price"), in each case
subject to the conditions set forth below.
(i) The Series A Preferred Units shall be redeemed only if the General
Partner shall concurrently therewith redeem an equivalent number of
shares of Series A Preferred Stock for REIT Shares or cash, as the
case may be. Such redemption of Series A Preferred Units shall occur
substantially concurrently with the
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redemption by the General Partner of such Series A Preferred Shares
(such date of redemption the "Redemption Date").
(ii) In the event that the General Partner redeems shares of Series A
Preferred Stock in exchange for REIT Shares, an equivalent number of
Series A Preferred Units shall be converted into a number of Class A
Units equal to (x) the number of REIT Shares issued by the General
Partner in redemption of such shares of Series A Preferred Stock
divided by (y) the Conversion Factor.
(iii) In the event that the General Partner redeems shares of Series A
Preferred Stock for cash (including payments of cash in lieu of
fractional REIT Shares), the Partnership shall redeem a like number
of Series A Preferred Units in exchange for the amount of cash that
the General Partner is required to pay pursuant to the terms of the
Series A Preferred Stock in connection with such redemption.
(iv) Upon any redemption of Series A Preferred Units, the Partnership
shall pay any accrued and unpaid distributions with respect to the
Series A Preferred Units being redeemed for any Distribution Period
ending on or prior to the Redemption Date. If the Redemption Date
falls after a Partnership Record Date and prior to the corresponding
Distribution Date, then the General Partner, in its capacity as the
holder of the Series A Preferred Units being redeemed, shall be
entitled to distributions payable on the corresponding Distribution
Date notwithstanding the redemption of such Series A Preferred Units
before such Distribution Date. Except as provided above, the
Partnership shall make no payment or allowance for unpaid
distributions, whether or not in arrears, on Series A Preferred
Units called for redemption.
(v) Any Class A Unit issued upon redemption of the Series A Preferred
Units shall be validly issued, fully paid and non-assessable.
(B) In the event that the General Partner is required to redeem any
shares of Series A Preferred Stock pursuant to the terms thereof, the
Partnership shall redeem an equivalent number of Series A Preferred Units for
consideration equal to the consideration payable by the General Partner upon
redemption of such shares of Series A Preferred Stock.
5. Conversion to Class A Units.
---------------------------
(A) In the event that a holder of Series A Preferred Stock
exercises its right to convert such Series A Preferred Stock into REIT
Shares, then, concurrently therewith, an equivalent number of Series A
Preferred Units
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shall be automatically converted into a number of Class A Units equal to (x)
the number of REIT Shares issued upon conversion of such Series A Preferred
Shares divided by (y) the Conversion Factor. Any such conversion will be
effective at the same time as the conversion of Series A Preferred Stock into
REIT Shares is effective.
(B) The General Partner, in its capacity as the holder of Series A
Preferred Units that are converted pursuant to this Section 4 effective
during the period after a Partnership Record Date and prior to the opening of
business on the corresponding Distribution Date, shall not be entitled to
receive the distribution payable on such Series A Preferred Units on such
Distribution Date notwithstanding such conversion thereof following the
corresponding Partnership Record Date and prior to such Distribution Date.
6. Ranking. Any class or series of Partnership Units shall be deemed
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to rank:
(A) prior to the Series A Preferred Units, as to the payment of
distributions and as to distribution of assets upon liquidation, dissolution
or winding up of the Partnership, if the holders of such class or series of
Partnership Units shall be entitled to the receipt of distributions or of
amounts distributable upon liquidation, dissolution or winding up, as the
case may be, in preference or priority to the holders of Series A Preferred
Units;
(B) on a parity with the Series A Preferred Units as to the payment
of distributions and as to the distribution of assets upon liquidation,
dissolution or winding up of the Partnership, whether or not the distribution
rates, distribution payment dates or redemption or liquidation prices per
Partnership Unit be different from those of the Series A Preferred Units, if
the holders of such class or series of Partnership Units and the Series A
Preferred Units shall be entitled to the receipt of distributions and of
amounts distributable upon liquidation, dissolution or winding up in
proportion to their respective amounts of accrued and unpaid distributions
per Partnership Unit or liquidation preferences, without preference or
priority one over the other ("Parity Units");
(C) junior to the Series A Preferred Units, as to the payment of
distributions or as to the distribution of assets upon liquidation,
dissolution or winding up of the Partnership, if such class or series of
Partnership Units shall be Junior Units; and
(D) junior to the Series A Preferred Units, as to the payment of
distributions and as to the distribution of assets upon liquidation,
dissolution or winding up of the Partnership, if such class or series of
Partnership Units shall be Fully Junior Units;
7. Voting. Except as required by law, the General Partner, in its
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capacity as the holder of the Series A Preferred Units, shall not be entitled
to
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vote at any meeting of the Partners or for any other purpose or otherwise to
participate in any action taken by the Partnership or the Partners, or to
receive notice of any meeting of the Partners.
8. Restriction on Ownership. The Series A Preferred Units shall be
------------------------
owned and held solely by the General Partner.
9. General. The rights of the General Partner, in its capacity as the
-------
holder of the Series A Preferred Units, are in addition to and not in
limitation on any other rights or authority of the General partner, in any
other capacity, under the Agreement. In addition, nothing contained in this
Exhibit F shall be deemed to limit or otherwise restrict any rights or
---------
authority of the General Partner under the Agreement, other than in its
capacity as the holder of the Series A Preferred Units.
* * * *
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