Exhibit 4.11
AMENDMENT NO. 1
DATED AS OF MAY 11, 2001
TO THE
SECURITIES PURCHASE AGREEMENT
DATED AS OF APRIL 27, 2001
This Amendment No. 1 (this "Amendment"), dated as of May 11, 2001, is
between The Xxxxx Corporation, a Delaware Company (the "Company"), The Xxxxx
Limited Partnership, a Delaware limited partnership (the "Operating
Partnership") and iStar Preferred Holdings LLC, a Delaware limited liability
company (the "Buyer").
RECITALS
A. The Company and the Buyer are parties to that certain Securities
Purchase Agreement dated as of April 27, 2001 (the "Securities Purchase
Agreement"). Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Securities Purchase Agreement.
B. The Initial Closing has been consummated but the Mandatory Closing
has not yet occurred.
C. In order to provide more assurance with respect to the protection of
the REIT Status of the Company and the value of the Buyer's investment in the
Company, the Company, the Operating Partnership and the Buyer desire to execute
and deliver amendments and modifications to certain of the documents executed in
connection with the Initial Closing which effectuate various changes to the
structure of the transaction contemplated by the Mandatory Closing but which
changes are being effected in such a manner so as not to affect the economics of
the transaction.
AGREEMENTS
In consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
SECTION 1. AMENDMENTS AND ADDITIONS TO THE TRANSACTION DOCUMENTS. In
connection with the consummation of the Mandatory Closing on the date hereof,
the Company, the Operating Partnership (as applicable) and the Buyer agree to
execute and, if applicable, deliver the following documents:
(a) an Amended and Restated Ownership Limit Waiver Agreement in the
form attached hereto as Exhibit A (the "Amended and Restated Ownership Limit
Waiver Agreement").
(b) a Second Amendment to the Limited Partnership Agreement of the
Operating Partnership (the "Second Partnership Agreement Amendment") providing
for:
(i) an Amended and Restated Exhibit 4 to the Limited
Partnership Agreement of the Operating Partnership
(Designation, Preferences and Rights of Series A Cumulative
Convertible Preferred Partnership Units of The Xxxxx Limited
Partnership), in the form attached hereto as Exhibit B (which,
among other things, re-designates the "Series A Cumulative
Convertible Preferred Partnership Units" as "Series A-1
Cumulative Convertible Preferred Partnership Units"); and
(ii) an Exhibit 5 to the Limited Partnership Agreement of the
Operating Partnership (Designation, Preferences and Rights of
Series A-2 Cumulative Convertible Preferred Partnership Units
of The Xxxxx Limited Partnership), in the form attached hereto
as Exhibit C.
(c) an Amendment No. 1 to the Registration Rights Agreement in the form
attached hereto as Exhibit D.
(d) the Amended and Restated Contingent Securities Purchase Warrant in
the form attached hereto as Exhibit E (the "Warrants").
SECTION 2. AMENDMENTS TO SECTION 1 OF THE SECURITIES PURCHASE
AGREEMENT. The second sentence of Section 1(a) shall be amended to read in its
entirety:
"Subject to the satisfaction of the conditions set forth in
Section 1(c), 9(b) and 10(b), the Company shall issue and sell
to Buyer and Buyer agrees to purchase from the Company all,
and not less than all, of the Mandatory Preferred Shares
unless the provisions of Section 13 hereof require that less
than all the Mandatory Preferred Shares be issued to Buyer, in
which event the Operating Partnership shall issue and sell to
Buyer and Buyer shall purchase from the Operating Partnership
that number of Series A-2 Preferred Units (as defined in the
Limited Partnership Agreement, as amended, of the Operating
Partnership) as determined pursuant to the provisions of
Section 13 and the Company shall issue and sell to Buyer and
Buyer shall purchase from the Company that number of Preferred
Shares as determined pursuant to the provisions of Section
13."
SECTION 3. AMENDMENTS TO SECTION 2 OF THE SECURITIES PURCHASE AGREEMENT. The
definition of the term "Securities" in Section 2(a) shall be amended to include
those Series A-2 Preferred Units, if any, purchased by Buyer at the Mandatory
Closing or issuable to Buyer upon exchange of Preferred Shares and the Common
Units (as hereinafter defined) issuable upon conversion of such Series A-2
Preferred Units.
Buyer understands that the certificates or other instruments
representing the Series A-2 Preferred Units and any Common Units (as defined in
the Limited Partnership Agreement of the Operating Partnership), if any, shall
bear a restrictive legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933,
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AS AMENDED, OR ANY STATE SECURITIES LAWS. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN
THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
QUALIFICATION PURSUANT TO ANY APPLICABLE STATE SECURITIES LAWS
OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM,
THAT REGISTRATION AND QUALIFICATION ARE NOT REQUIRED UNDER
SAID ACT OR LAWS OR (II) UNLESS SOLD PURSUANT TO RULE 144
UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN, REPURCHASE FACILITY, OR OTHER FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.
Buyer agrees to comply with the restrictions set forth in the legend above and
to require any transferee to so agree as a condition of transfer. The legend set
forth above shall be removed and the Company shall issue a certificate or other
instrument without such legend to the holder of the Securities upon which it is
stamped, if (i) such Securities are registered for resale under the 1933 Act,
(ii) in connection with a sale transaction, such holder provides the Operating
Partnership with an opinion of counsel, in a generally acceptable form, to the
effect that a public sale, assignment or transfer of the Securities may be made
without registration under the 1933 Act, or (iii) such holder provides the
Operating Partnership with reasonable assurances that the Securities can be sold
pursuant to Rule 144(k) promulgated under the 1933 Act (or any successor
thereto).
SECTION 4. AMENDMENTS TO SECTION 3 OF THE SECURITIES PURCHASE
AGREEMENT.
(a) SECTION 3(b). Section 3(b) shall be amended to read in its
entirety:
"The Company has the requisite corporate power and authority
and the Operating Partnership has the requisite partnership
power and authority, in each case and as applicable and to the
extent it is a party thereto, to enter into and perform its
respective obligations under the Securities Purchase
Agreement, this Amendment, the Amended and Restated Ownership
Limit Waiver Agreement, the Registration Rights Agreement and
Amendment No. 1 thereto, the Partnership Agreement Amendment
(as defined in Section 10 of the Securities Purchase
Agreement), as amended by the Second Partnership Agreement
Amendment, the Warrants and each of the other agreements
entered into by the parties hereto in connection with the
transactions contemplated by the Securities Purchase
Agreement, as amended hereby, (collectively the "TRANSACTION
DOCUMENTS"), and to issue the Securities in accordance with
the terms hereof and thereof, as amended hereby. The execution
and delivery of the Transaction Documents by the Company and
the Operating Partnership, as applicable,
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the adoption, execution and filing of the Certificate of
Designations by the Company, the adoption and execution of the
Partnership Agreement Amendment, and the Second Partnership
Agreement Amendment, and the consummation by the Company and
the Operating Partnership of the transactions contemplated
hereby and thereby, including, but not limited to, the
issuance of the Preferred Shares, Series A-2 Preferred Units,
if any, and Warrants and the reservation for issuance and the
issuance of the Conversion Shares, Common Units and Warrant
Shares issuable upon conversion or exercise thereof, have been
duly authorized by the Company's Board of Directors (or a duly
authorized committee thereof) in the case of the Company and
by the Company as the General Partner of the Operating
Partnership in the case of the Operating Partnership, and no
further consent or authorization is required by the Company,
its Board of Directors or its stockholders or the Operating
Partnership. The Transaction Documents have been duly executed
and delivered by the Company and the Operating Partnership, as
applicable. The Transaction Documents constitute the valid and
binding obligations of the Company enforceable against the
Company and/or of the Operating Partnership enforceable
against the Operating Partnership, as applicable, in
accordance with their terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of
creditors' rights and remedies. The Certificate of
Designations has been filed with the State of Delaware and is
in full force and effect, enforceable against the Company in
accordance with its terms and has not been amended, rescinded
or revoked in any way. The Partnership Agreement Amendment and
the Second Partnership Agreement Amendment will have been duly
adopted by the General Partner of the Operating Partnership
prior to the Mandatory Closing and will be in full force and
effect as of the Mandatory Closing, enforceable against the
Operating Partnership in accordance with their terms, and
shall not have been further amended."
(b) SECTION 3(c)(ii). The following sentence shall be added to
Section 3(c)(ii) as the last sentence thereof:
"Other than the Series A-1 Preferred Units of the Operating
Partnership held by the General Partner in connection with the
issuance by the Company of the Initial Preferred Shares, there
are no Preferred Units of the Operating Partnership issued or
outstanding as of immediately prior to the Mandatory Closing."
(c) SECTION 3(d). The following shall be added to the end of
Section 3(d):
The Series A-2 Preferred Units are duly authorized and, upon
issuance in accordance with the terms hereunder, shall be
validly issued, fully paid and nonassessable, free from all
taxes, liens and charges with respect to
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the issuance thereof and entitled to the rights and
preferences set forth in Exhibit 5 to the Second Partnership
Agreement Amendment. 3,589,835 Common Units have been duly
authorized for issuance upon conversion of the Series A-2
Preferred Units, and upon such conversion the Common Units
will be validly issued and free from all taxes, liens and
charges with respect to the issue thereof, and the holders
shall be entitled to all rights accorded a holder of Common
Units by the Operating Partnership. Assuming the accuracy of
the representations and warranties of Buyer contained in
Section 2 hereof, the issuance of Series A-2 Preferred Units,
if required by the provisions of Section 13 hereof, will be
exempt from registration under the 1933 Act.
(d) SECTION 3(e). Section 3(e) shall be amended to read in its
entirety:
NO CONFLICTS. Except as disclosed in SCHEDULE 3(e)(i), the
execution, delivery and performance of the Transaction
Documents by the Company and the Operating Partnership, as
applicable, the performance by the Company of its obligations
under the Certificate of Designations, the performance by the
Operating Partnership of its obligations under the Partnership
Agreement Amendment and the Second Partnership Agreement
Amendment, and the consummation by the Company and the
Operating Partnership of the transactions contemplated hereby
and thereby (including, but not limited to, the reservation
for issuance and issuance of the Conversion Shares, the
Warrant Shares and, if applicable, the Series A-2 Preferred
Units and Common Units) will not (i) result in a violation of
the Charter Documents of the Company, the Operating
Partnership or any Significant Subsidiary; (ii) conflict with,
or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration
or cancellation of, any agreement, indenture or instrument to
which the Company, the Operating Partnership or any of the
Company's other Subsidiaries is a party and the termination,
amendment, acceleration or cancellation of which would
reasonably be expected to result, either individually or in
the aggregate, in a Material Adverse Effect; (iii) result in a
violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws and
regulations and the rules and regulations of the Principal
Market (as hereinafter defined)) applicable to the Company,
the Operating Partnership or any Significant Subsidiary or by
which any property or asset of the Company, the Operating
Partnership or any Significant Subsidiary is bound or
affected. Except as disclosed in SCHEDULE 3(e)(ii), none of
the Company, the Operating Partnership or any of the Company's
other Subsidiaries is in violation of its respective Charter
Documents, except where any such violations and defaults could
not reasonably be expected to result, either individually or
in the aggregate, in a Material Adverse Effect. Except as
disclosed in SCHEDULE 3(e)(iii), none of the Company, the
Operating Partnership or any of the Company's other
Subsidiaries is in violation of any term of or in
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default under any contract, agreement, mortgage, indebtedness,
indenture, instrument, judgment, decree or order or any
statute, rule or regulation applicable to the Company, the
Operating Partnership or the Company's other Subsidiaries,
respectively, or by which any of their respective property is
bound, except where such violations and defaults could not
reasonably be expected to result, either individually or in
the aggregate, in a Material Adverse Effect. The business of
the Company and its Subsidiaries is not being conducted, and
shall not be conducted, in violation of any law, ordinance or
regulation of any governmental entity, except where such
violations could not reasonably be expected to result, either
individually or in the aggregate, in a Material Adverse
Effect. Except as specifically contemplated by this Agreement
and as required under the 1933 Act and applicable state
securities laws, neither the Company nor the Operating
Partnership is required to obtain any consent, authorization
or order of, or make any filing or registration with, any
court or governmental agency or any regulatory or
self-regulatory agency in order for it to execute, deliver or
perform any of its obligations under or contemplated by the
Transaction Documents or, in the case of the Company, to
perform its obligations under the Certificate of Designations
or, in the case of the Operating Partnership, to perform its
obligations under the Partnership Agreement Amendment or the
Second Partnership Agreement Amendment, including pursuant to
Exhibit 5 thereto, in each case in accordance with the terms
hereof or thereof. Except as disclosed in SCHEDULE 3(e)(iv),
all consents, authorizations, orders, waivers, filings and
registrations that the Company or the Operating Partnership is
required to obtain as described in the preceding sentence have
been obtained or effected on or prior to the date hereof. The
Company is not in violation of the listing requirements of the
Principal Market and has no actual knowledge of any facts
which would reasonably lead to delisting or suspension of the
Common Stock by the Principal Market in the foreseeable
future.
SECTION 5. AMENDMENTS TO SECTION 4 OF THE SECURITIES PURCHASE
AGREEMENT.
(a) SECTION 4(c). Section 4(c) shall be amended to read in its
entirety:
"REPORTING STATUS. Until the earlier of (i) the date which is
five and one-half (5 1/2) years from the Mandatory Closing
Date, (ii) such time as no Conversion Shares or Warrant Shares
are held by Investors (as defined in the Registration Rights
Agreement) or are issuable to Investors upon the conversion of
Preferred Shares, redemption of Common Units of the Operating
Partnership or exercise of Warrants held by Investors and
(iii) one month after the date on which no Preferred Shares or
Series A-2 Preferred Units remain issued and outstanding (the
"REPORTING PERIOD"), the Company shall file all reports
required to be filed with the SEC pursuant to the 1934 Act,
and the Company shall not terminate its status as an issuer
required to file reports under the 1934 Act even if the 1934
Act
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or the rules and regulations thereunder would otherwise permit
such termination. Notwithstanding the foregoing, upon a Change
of Control (and, if any holder(s) of Preferred Shares or
Series A-2 Preferred Units exercise a Put Option in connection
therewith, upon the payment in full of the Put Option Exercise
Price due by the Company or the Operating Partnership to such
holder(s)), the requirements of this Section 4(c) shall
terminate."
(b) "AS LONG AS ANY PREFERRED SHARES REMAIN OUTSTANDING." In each
instance where the phrase "as long as any Preferred Shares remain outstanding"
or similar words or phrases appear, such phrase shall be amended and interpreted
to mean "as long as any Preferred Shares or Series A-2 Preferred Units remain
outstanding."
(c) SECTIONS 4(e) AND 4(k). The final sentence of Sections 4(e) and
4(k) shall be amended so that the phrase "and shall not trade in the Company's
securities so long as it is in possession of material, non-public information"
shall be amended to read in its entirety:
"and acknowledges and agrees that securities laws prohibit it
from trading in the Company's securities on the basis of
material, non-public information in its possession"
(d) SECTION 4(f). Section 4(f) shall be amended to read in its
entirety:
"The Company and the Operating Partnership shall use their
best efforts to at all times have authorized, and reserved for
the purpose of issuance, no less than the aggregate maximum
number of shares of Common Stock or Common Units, as
applicable, that may be issuable upon conversion of all
outstanding Preferred Shares or Series A-2 Preferred Units,
redemption of all Common Units issued upon conversion of
Series A-2 Preferred Units, and exercise of all outstanding or
issuable Warrants (without regard to any limitations on
exercises other than limitations on exercise to the extent
that Preferred Shares or Series A-2 Preferred Units are
outstanding)."
(e) SECTION 4(j). Section 4(j) shall be amended to read in its
entirety:
"On or before the sixth (6th) Business Day following the
Mandatory Closing Date, the Company shall file a Form 8-K with
the SEC describing the terms of the transactions contemplated
by the Transaction Documents and the transactions consummated
on the Initial Closing Date and the Mandatory Closing Date. "
(f) SECTION 4(s). The preamble of Section 4(s) shall be amended to read
in its entirety:
"Without the prior written approval of the holder(s) of a
majority of the issued and outstanding Preferred Shares and
Series A-2 Preferred Units, considered together as a single
class with each Preferred Share having one
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vote and each Series A-2 Preferred Unit having one vote, which
approval shall not be unreasonably withheld, delayed or
conditioned with respect to activities that in the reasonable
judgment of such holder(s) would not have an adverse effect on
the holder(s) of the Preferred Shares or Series A-2 Preferred
Units, the Company shall not:"
(g) SECTION 4(s)(ii). Section 4(s)(ii) shall be amended to read in its
entirety:
"CHARTER AMENDMENTS. Make any amendment to the Certificate of
Incorporation or By-Laws or the Charter Documents of the
Company or the Operating Partnership (including to Exhibit 4
or 5 to the Partnership Agreement) in a manner that could
adversely affect the powers, preferences or the rights of the
Preferred Shares, Series A-1 Preferred Units (as defined in
the Partnership Agreement) or Series A-2 Preferred Units
(including any amendment, revision, revocation or other change
to the Ownership Limit that reduces it below 9.225%) or make
any amendment to the Certificate of Incorporation or By-Laws
or the Charter Documents of any wholly-owned Subsidiary of the
Company in a manner that could adversely affect the powers,
preferences or the rights of the Preferred Shares, Series A-1
Preferred Units or Series A-2 Preferred Units or make any
material amendment to the Charter Documents of any other
Subsidiary of the Company in a manner that could adversely
affect the powers, preferences or the rights of the Preferred
Shares, Series A-1 Preferred Units or Series A-2 Preferred
Units. Without limiting the foregoing, the reduction of the
Ownership Limit below 9.225% or the imposition of any capital
stock transfer restriction shall be deemed to have an adverse
effect on the holders of the Preferred Shares."
(h) SECTION 4(s)(iv). Section 4(s)(iv) shall be amended so that each
reference to "Preferred Shares" shall be amended to state "Preferred Shares,
Series A-1 Preferred Units or Series A-2 Preferred Units"
(i) SECTION 4(s)(v)). Section 4(s)(v) shall be amended so that the word
"distribution" shall be added after the word "dividend" and the phrase "or
Series A-2 Preferred Units" shall be added after the phrase "Preferred Shares"
and Subsection (ii) of Section 4(s)(v) shall be amended to state in its entirety
"interests in the Operating Partnership which are pari passu or senior to the
Series A-1 Preferred Units or Series A-2 Preferred Units."
(j) SUBSECTION (i) OF SECTION 4(t). Subsection (i) of Section 4(t)
shall be amended to state in its entirety "no holder of Preferred Shares or
Series A-2 Preferred Units who is a Competitor (as hereinafter defined) shall be
entitled to receive any information from the Company that has not been publicly
disclosed,".
(k) SECTION 4(u). Section 4(u) shall be amended to read in its
entirety:
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"MAJOR HOLDER" shall mean a holder of at least one hundred
thousand (100,000) Preferred Shares and/or Series A-2
Preferred Units in the aggregate."
"SUBSTANTIAL HOLDER" shall mean a holder of at least two
hundred fifty thousand (250,000) Preferred Shares and/or
Series A-2 Preferred Units in the aggregate."
(l) FINAL SENTENCE. The final sentence of Section 4 shall read in its
entirety:
"Unless otherwise specified herein, the provisions of this
Section 4 shall terminate at such time as no Preferred Shares
or Series A-2 Preferred Units remain outstanding."
SECTION 6. AMENDMENTS TO SECTION 5 OF THE SECURITIES PURCHASE
AGREEMENT.
(a) SECTION 5(b). The second sentence of Section 5(b) shall be amended
so that the Company shall notify the holders of Preferred Shares and the holders
of Series A-2 Preferred Units of the matters and at the times specified therein.
(b) DEFINITION OF EVENT OF NONCOMPLIANCE. Subsection (a) of the
definition of "event of Noncompliance" shall be amended to read in its entirety:
"(a) the Company has not paid in cash in full the amount of
accumulated and accrued but unpaid dividends on the Preferred
Shares for four consecutive Dividend Reference Dates (as
defined in the Certificate of Designations) or the Operating
Partnership has not paid in cash in full the amount of
accumulated and accrued but unpaid distributions on the Series
A-2 Preferred Units for four consecutive Distribution
Reference Dates (as defined in the Partnership Agreement
Amendment, as amended by the Second Partnership Agreement
Amendment)"
SECTION 7. AMENDMENTS TO SECTION 6 OF THE SECURITIES PURCHASE
AGREEMENT.
(a) SECTION 6(b). The last sentence of Section 6(b) shall be amended so
that the Company shall notify the holders of Preferred Shares and the holders of
Series A-2 Preferred Units of the matters and at the times specified therein.
(b) SECTION 6(c). Section 6(c) shall be amended so that the phrase
"Unless the Ownership Limit Waiver Agreement provides otherwise," shall be
deleted.
SECTION 8. AMENDMENTS TO SECTION 7 OF THE SECURITIES PURCHASE
AGREEMENT.
(a) SECTION 7(a). Section 7(a) shall be amended so that the Company
shall provide the holders of Preferred Shares and the holders of Series A-2
Preferred Units with notice of the matters and at the times specified therein.
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(b) SUBSECTION (i) OF SECTION 7(a). Subsection (i) of Section 7(a)
shall be amended so that the Company shall deliver to each holder of Preferred
Shares and each holder of Series A-2 Preferred Units such information and
documents at the times as provided for therein.
(c) SECTION 7(b). Section 7(b) shall be amended to read in its
entirety:
"The Company shall have the right to sell, or allow its
Subsidiaries to sell, directly or indirectly, all or any
portion of the Restricted Properties, and, subject to
obtaining the prior written consent of the holder(s) of a
majority of the issued and outstanding Preferred Shares and
Series A-2 Preferred Units, considered together as a separate
class with each Preferred Share having one vote and each
Series A-2 Preferred Unit having one vote as provided for in
Section 4(s), the Company and its Subsidiaries shall have the
right to consummate a Restricted Property Refinancing, subject
to the right of each holder of Preferred Shares to require the
Company, and the right of each holder of Series A-2 Preferred
Units to require the Operating Partnership, to purchase a
portion (which may be as many as all) of such holder's
Preferred Shares or Series A-2 Preferred Units, as applicable,
concurrently with the closing of such Restricted Property
Transaction with a portion of the proceeds thereof. The
aggregate amount of Preferred Shares plus Series A-2 Preferred
Units that the Company and the Operating Partnership,
respectively, shall be obligated to purchase in connection
with a Restricted Property Transaction shall be the amount
determined pursuant to Section 7(c). The closing of a
Restricted Property Transaction shall be conditioned upon
provision for payment to each holder of Preferred Shares
and/or Series A-2 Preferred Units of the amount owed pursuant
to Section 7(c). If such payment or provision therefore cannot
be made for any reason, the proposed Restricted Property
Transaction shall not be consummated. If, in accordance with
Section 7(c), not all the Preferred Shares and Series A-2
Preferred Units requested to be repurchased by the Company and
the Operating Partnership, as applicable, in connection with a
Restricted Property Transaction are to be repurchased,
repurchases of Preferred Shares and Series A-2 Preferred Units
shall be made ratably from each holder based on the number of
Preferred Shares and/or Series A-2 Preferred Units, as
applicable, held by each holder requesting a repurchase;
provided that no holder shall have repurchased from such
holder more shares than such holder has requested to have
repurchased."
(d) SECTION 7(c). The first sentence of Section 7(c) shall be amended
to read in its entirety:
"In connection with the consummation of a Restricted Property
Transaction, the aggregate amount Preferred Shares plus Series
A-2 Preferred Units that the Company and Operating
Partnership, respectively, shall be obligated to purchase
shall be equal to (i) the applicable release price set forth
in SCHEDULE 7 (the "RELEASE PRICE") for the Restricted
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Property which is the subject of the Restricted Property
Transaction divided by (ii) $100."
SECTION 9. AMENDMENTS TO SECTIONS 9 AND 10 OF THE SECURITIES PURCHASE
AGREEMENT.
(a) SECTIONS 9(b) AND 10(b). Sections 9(b) and 10(b) shall be amended
so that the Company's obligation to issue and sell to the Buyer and the Buyer's
obligation to purchase from the Company the Mandatory Preferred Shares, and, if
applicable, the Operating Partnership's obligation to issue and sell to Buyer
and the Buyer's obligation to purchase from the Operating Parnership Series A-2
Preferred Units as determined pursuant to the provisions of Section 13, shall be
subject to the provisions otherwise set forth in Section 9(b) and 10(b)
respectively.
(b) SECTION 10(b). Section 10(b) shall be further amended by adding a
new Section 10(b)(xiv) to read in its entirety as follows:
"a certificate shall have been delivered to Buyer executed by
the Bank in the form attached hereto as Exhibit F."
SECTION 10. AMENDMENTS TO SECTION 12 OF THE SECURITIES PURCHASE
AGREEMENT.
(a) SECTION 12(e). Section 12(e) shall be amended so that the Agreement
may not be amended or waived "other than by an instrument in writing signed by
the Company, the Operating Partnership and the holder(s) of at least two-thirds
(66-2/3%) of the issued and outstanding Preferred Shares and Series A-2
Preferred Units, considered together as a separate class with each Preferred
Share having one vote and each Series A-2 Preferred Unit having one vote and
that no such amendment shall be effective unless it applies to all holders of
Preferred Shares, Series A-2 Preferred Units and Warrants then outstanding.
(b) SECTION 12(f). Section 12(f) shall be amended to provide that
notices to the Operating Partnership shall be delivered to the Company, as
General Partner of the Operating Partnership, in the same manner and to the same
address as notices to the Company shall be delivered.
(c) SECTION 12(g). Section 12(g) shall be amended so that each
reference in the first and third sentences of Section 12(g) to "Preferred
Shares" shall be a reference to "Preferred Shares or Series A-2 Preferred Units"
and that the Company shall be required to obtain the prior written consent of
the holder(s) of at least two-thirds (66-2/3%) of the issued and outstanding
Preferred Shares and Series A-2 Preferred Units, considered together as a
separate class with each Preferred Share having one vote and each Series A-2
Preferred Unit having one vote before it may assign the Agreement or any rights
or obligations hereunder.
SECTION 11. ADDITION OF SECTION 13 TO THE SECURITIES PURCHASE
AGREEMENT. A new Section 13 is added to the Securities Purchase Agreement to
read in its entirety as follows:
"13. PROVISIONS REGARDING EXCHANGES FOR OPERATING PARTNERSHIP UNITS.
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a. If as of the Mandatory Closing the Buyer cannot make the
representations of the Buyer called for by the Amended and Restated Ownership
Limit Waiver Agreement or if the Company advises the Buyer in writing that,
after reasonable due diligence conducted in cooperation with the Buyer, the
Company has concluded in good faith that the Tax Conditions (as hereinafter
defined) would not be satisfied, then a portion of the investment to be made by
the Buyer on the Mandatory Closing (the "MANDATORY CLOSING INVESTMENT") shall be
made in Series A-2 Preferred Units (as defined in the Limited Partnership
Agreement of the Operating Partnership, as amended (the "PARTNERSHIP
AGREEMENT")) of the Operating Partnership. Subject to the provisions of the
following sentence, that portion of the Mandatory Closing Investment to be made
in such Series A-2 Preferred Units shall be an amount sufficient to reduce the
Buyer's ownership of the capital stock of the Company to less than 9.9% of the
value of the capital stock of the Company (taking into account any attribution
of the Company's capital stock to the Buyer arising from the Buyer's 10% or
greater shareholders, as determined under Section 318(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), as modified by Section 856(d) of the
Code), such value to be computed utilizing the average closing price of the
Company's Common Stock on the New York Stock Exchange for the ten trading days
ending on the trading day immediately preceding the Mandatory Closing Date and
assuming that the value of the Preferred Shares is equal to the Series A
Conversion Value (as defined in the Certificate of Designations) of such
Preferred Shares. If the Buyer cannot make the representation called for in
Section (a) of the Certificate of Representations and Covenants for Ownership
Limit Waiver attached as Exhibit B to the Amended and Restated Ownership Limit
Waiver Agreement, then the provisions of the immediately preceding sentence
shall apply except that 9.225% shall be substituted for 9.9%. If a portion of
the Mandatory Preferred Investment is to be made in such Series A-2 Preferred
Units, then for each Preferred Share that would otherwise be purchased at the
Mandatory Closing but for the provisions of this Section 13(a), the Buyer shall
purchase in lieu thereof that number of Series A-2 Preferred Units equal to the
quotient of one divided by the Conversion Multiple (as defined in the
Partnership Agreement) (the Company represents and warrants to the Buyer that as
of the date hereof the Conversion Multiple is one). The purchase price of each
Series A-2 Preferred Unit purchased at the Mandatory Closing shall be
$[CONFIDENTIAL TREATMENT REQUESTED]*.
b. If any proposed pledgee or subsequent transferee of Preferred Shares
or Common Shares cannot make the representations called for by the Amended and
Restated Ownership Limit Waiver Agreement or if the Company advises such pledgee
or subsequent transferee in writing that, after reasonable due diligence
conducted in cooperation with such pledgee or subsequent transferee, the Company
has concluded in good faith that the Tax Conditions would not be satisfied,
then, simultaneously with the effectiveness of the pledge or transfer, a portion
of the Preferred Shares to be pledged or transferred to such pledgee or
subsequent transferee shall be contributed to the Operating Partnership in
exchange for Series A-2 Preferred Units in order to reduce such pledgee's or
subsequent transferee's ownership of the capital stock of the Company to less
than 9.9% of the value of the capital stock of the Company (taking into account
any attribution of the Company's capital stock to the pledgee or subsequent
transferee arising from the pledgee's or subsequent transferee's 10% or greater
shareholders, as determined under Section 318(a) of the Code, as modified by
Section 856(d) of the Code), such value to be computed utilizing the average
closing price of the Company's Common Stock on the New York Stock Exchange for
the ten trading days ending on the trading day immediately preceding the date of
the pledge or transfer and assuming that the value of the Preferred Shares is
----------------
*[CONFIDENTIAL TREATMENT REQUESTED] Indicates material that has been omitted
and for which confidential treatment is being requested. All such omitted
material is being filed with The Securities and Exchange Commission pursuant
to Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
12
equal to the Series A Conversion Value of such Preferred Shares as of such date.
If the Buyer cannot make the representation called for in Section (a) of the
Certificate of Representations and Covenants for Ownership Limit Waiver attached
as Exhibit B to the Amended and Restated Ownership Limit Waiver Agreement, then
the provisions of the immediately preceding sentence shall apply except that
9.225% shall be substituted for 9.9%. In any contribution and exchange to be
made pursuant to this Section 13(b), the requisite contribution and exchange
shall be made first of Common Shares being pledged or transferred and then of
Preferred Shares being pledged or transferred. Common Shares shall be exchanged
for Common Units (as defined in the Partnership Agreement) as hereinafter
provided and Preferred Shares shall be exchanged for Series A-2 Preferred Units
as hereinafter provided. For each Common Share that would otherwise be pledged
or transferred, the pledgee or transferee shall receive in lieu thereof that
number of Common Units equal to the quotient of one divided by the Conversion
Multiple then in effect. For each Preferred Share that would otherwise be
pledged or transferred, the pledgee or transferee shall receive in lieu thereof
that number of Series A-2 Preferred Units equal to the quotient of one divided
by the Conversion Multiple then in effect.
c. If at any time there would have been, but for the application of the
remedies set forth herein, a violation of one or more of the Tax Conditions,
then without any action on the part of either the holders of the Preferred
Shares or the Common Shares or the Company or the Operating Partnership, a
number of Preferred Shares or Common Shares, as applicable, shall automatically
be contributed to the Operating Partnership in exchange for Series A-2 Preferred
Units or Common Units, as applicable, in an amount sufficient to prevent the
violation of the Tax Conditions from occurring and effective as of the close of
business on the business day prior to the first day on which the Tax Conditions
would not have been satisfied but for such contribution and exchange. In any
contribution to be made pursuant to this Section 13(c), the requisite
contribution shall be made first of Common Shares prior to any contribution of
Preferred Shares. If the exchange involves Series A Preferred Shares, the
exchange shall be effected through a contribution of the Series A Preferred
Shares to the Operating Partnership in exchange for Series A-2 Preferred Units
(with the result that the Operating Partnership would become an owner of Series
A Preferred Shares). The Operating Partnership and the Company shall then
convert such Series A Preferred Shares into Common Stock and the Operating
Partnership shall retain such Common Stock at least until the holder of the
Series A-2 Preferred Units issued in exchange for the contribution of such
Series A Preferred Shares has disposed of those Series A-2 Preferred Units. In
any event, the exchange of the Series A Preferred Shares for Series A-2
Preferred Units, and any redemption proceeds, conversion, distributions or other
payments made thereafter on the Series A Preferred Shares contributed to the
Operating Partnership or on any Common Stock into which they were converted by
the Partnership, shall not be included in any calculations relating to dividends
or other payments due to holders of Series A Preferred Shares other than the
Operating Partnership. For each Common Share to be exchanged, such holder shall
receive that number of Common Units equal to the quotient of one divided by the
Conversion Multiple then in effect. For each Preferred Share to be exchanged,
the holder shall receive in lieu thereof that number of Series A-2 Preferred
Units equal to the quotient of one divided by the Conversion Multiple then in
effect. Such exchange shall be effective as of the close of business on the
business day prior to the first day on which the Tax Conditions would not have
been satisfied but for such exchange.
13
d. Each holder of Preferred Shares shall have the right to exchange all
or any portion of the Preferred Shares for Series A-2 Preferred Units for any
reason at any time and from time to time. Any exchange described herein would be
effected in the manner described in the following paragraph (e).
e. In no event and under no circumstances (other than in the event of
fraud with respect to the Certificate (as defined in the Amended and Restated
Ownership Limit Waiver Agreement) or the breach of the representation with
respect to direct ownership of tenants under Section 2.5 of the Amended and
Restated Ownership Limit Waiver Agreement, in each case as determined by a
final, non-appealable judgment of a court of competent jurisdiction) shall any
of the Series A Preferred Shares, the Series A-2 Preferred Units or securities
issued or issuable upon conversion or exchange thereof become "Excess Stock" as
defined in the Charter while held by the Buyer or a Subsequent Holder to which
the Ownership Limit Waiver in the Amended and Restated Ownership Limit Waiver
Agreement applies. If any of the conditions to the effectiveness of the
Ownership Limit Waiver is violated by any Person, there shall be an automatic
exchange, with an effective date as of the day prior to the event giving rise to
such violation, of Series A Preferred Shares for Series A-2 Preferred Units (or
Common Shares into Common Units, as applicable) in an amount sufficient to keep
the Ownership Limit Waiver in effect. The exchange shall occur by operation of
law without the requirement for any action on the part of any party. If the
exchange involves Series A Preferred Shares, the exchange shall be effected
through a contribution of the Series A Preferred Shares to the Operating
Partnership in exchange for Series A-2 Preferred Units (with the result that the
Operating Partnership would become an owner of Series A Preferred Shares). The
Operating Partnership and the Company shall then convert such Series A Preferred
Shares into Common Stock and the Operating Partnership shall retain such Common
Stock at least until the holder of the Series A-2 Preferred Units issued in
exchange for the contribution of such Series A Preferred Shares has disposed of
those Series A-2 Preferred Units. In any event, the exchange of the Series A
Preferred Shares for Series A-2 Preferred Units, and any redemption proceeds,
conversion, distributions or other payments made thereafter on the Series A
Preferred Shares contributed to the Operating Partnership or on any Common Stock
into which it is converted by the Partnership, shall not be included in any
calculations relating to dividends or other payments due to holders of Series A
Preferred Shares other than the Operating Partnership. In any contribution to be
made pursuant to this Section 13(e), the requisite contribution shall be made
first of Common Shares prior to the contribution of Preferred Shares. For each
Common Share to be exchanged, such holder shall receive that number of Common
Units equal to the quotient of one divided by the Conversion Multiple then in
effect. For each Preferred Share to be exchanged, the holder shall receive in
lieu thereof that number of Series A-2 Preferred Units equal to the quotient of
(i) the Series A Conversion Value then in effect divided by the Series A
Conversion Price then in effect divided by (ii) the Conversion Multiple then in
effect. Such exchange shall be effective as of the close of business on the
business day prior to the first day on which the Tax Conditions would not have
been satisfied but for such exchange.
f. Intentionally omitted.
g. The Company and the Operating Partnership shall promptly take all
action or actions necessary to keep the Conversion Multiple at one and to insure
that each Series A
14
Preferred Share has the same economic value, rights and interest as the Series
A-2 Preferred Units, and neither the Company nor the Operating Partnership shall
take any action that would change the Conversion Multiple to something other
than 1.
h. As used herein, the term "Tax Conditions" shall mean the
following:
1. The Acquisition (as defined in the Charter) and Beneficial
Ownership (as defined in the Charter) of Preferred Shares
and/or Common Shares by the Buyer or any Subsequent Holder (as
defined in the Ownership Limit Waiver Agreement) permitted by
reason of the Ownership Limit Waiver (as defined in the
Ownership Limit Waiver Agreement) shall not and is not
reasonably expected to cause the Company to be considered to
own for purposes of Section 856(d)(2)(B), applying the
applicable constructive ownership rules, an interest in any
one or more tenants of the Company and its subsidiaries that
is described in Section 856(d)(2)(B) of the Code and from
which the Company derives, in the aggregate, more than 0.5% of
its gross income for any calendar year.
2. The Acquisition and Beneficial Ownership of Preferred Shares
and/or Common Shares by Buyer or any Subsequent Holder
permitted by reason of the Ownership Limit Waiver shall not
and is not reasonably expected to cause the Company to fail to
qualify as a "domestically-controlled REIT" within the meaning
of Section 897(h)(2) of the Code.
3. The Acquisition and Beneficial Ownership of Preferred Shares
and/or Common Shares permitted by reason of the Ownership
Limit Waiver shall not and will not cause any individual
(within the meaning of Section 542(a)(2) of the Code,
determined taking into account Section 856(h)(3)(A) of the
Code) to be considered to have Beneficial Ownership of
Company's stock that violates the Ownership Limit, as
increased by the Board pursuant to Section 12.9 of the
Charter).
SECTION 12. ADDITION OF SECTION 14 TO THE SECURITIES PURCHASE
AGREEMENT. A new Section 14 is added to the Securities Purchase Agreement to
read in its entirety as follows:
"14. PROVISIONS REGARDING INTERNAL RATE OF RETURN CALCULATIONS AND
PAYMENT OF PURCHASE PRICE OF MANDATORY PREFERRED SHARES.
(a) For purposes of accounting for and calculating payments made, or to
be made, by the Company on the Preferred Shares and by the Operating Partnership
on the Series A-2 Preferred Units that involve a determination of an Internal
Rate of Return (as defined in the Certificate of Designations), the provisions
of this Section 14 shall apply. For any such determination, it shall be assumed
that there are twelve (12) periods in each year, which shall be each calendar
month of each such year, and that each such period shall end on the last day of
each such calendar month. In the event a payment by the Company or the Operating
Partnership to which this Section 14 applies is received by the Buyer on or
before the fifth (5th) Business Day
15
of a period, such payment shall be deemed to have been received by the Buyer on
the last day of the previous period. In the event a payment by the Company or
the Operating Partnership to which this Section 14 applies is received by the
Buyer after the fifth (5th) Business Day but before the last day of such period,
such payment shall be deemed to have been received by the Buyer on the last day
of the previous period, provided that in addition to any amount due to the Buyer
in connection with such payment as of the end of the previous period, Buyer
shall be entitled to also be paid an amount equal to the applicable Internal
Rate of Return on the Stated Liquidation Value (as defined in the Certificate of
Designations) for the number of days such payment is made after the end of the
previous period.
(b) The payment of the Purchase Price for the Preferred Shares and/or
Series A-2 Preferred Units purchased by the Buyer at the Initial Closing and the
Mandatory Closing shall be deemed to have been paid on April 30, 2001 and May
31, 2001, respectively. For purposes of the first assumption contained in the
definition of "Internal Rate of Return" in the Certificate of Designations, the
Mandatory Closing shall be deemed to have occurred on May 31, 2001. At the
Mandatory Closing, the Buyer shall be credited with having paid to the Company
as part of the Purchase Price an aggregate amount equal to an annual rate of
[CONFIDENTIAL TREATMENT REQUESTED]*% (i.e., the difference between the
[CONFIDENTIAL TREATMENT REQUESTED]*% Internal Rate of Return and the
[CONFIDENTIAL TREATMENT REQUESTED]*% Regular Dividend Rate to be paid during
the first anniversary of the initial issuance of the Preferred Shares)
multiplied by the Purchase Price otherwise to be paid by the Buyer at the
Mandatory Closing for the number of days between the day of the Mandatory
Closing and the end of the period during which the Mandatory Closing occurs,
and the actual amount to be paid by the Buyer to the Company at the Mandatory
Closing shall be the Purchase Price less such credit, provided that for
purposes of all computations of or involving Internal Rate of Return under
the Certificate of Designations, this Agreement and the other Transaction
Documents, Buyer shall be treated as having paid the full Purchase Price.
(b) The preceding paragraphs (a) and (b) shall be deemed a part of the
sample calculations attached as exhibits to this Agreement."
SECTION 13. REFERENCE TO AND EFFECT ON THE SECURITIES PURCHASE
AGREEMENT. Except as amended hereby, the Securities Purchase Agreement remains
in full force and effect and is hereby ratified and confirmed.
SECTION 14. EXECUTION IN COUNTERPARTS. This Amendment may be executed
in two counterparts, each of which when so executed and delivered shall be
deemed to be an original and both of which taken together shall constitute one
and the same instrument.
SECTION 15. HEADINGS. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
SECTION 16. EFFECTIVENESS. This Amendment will become effective after a
counterpart to this Amendment have been executed by the Company, the Operating
Partnership and the Buyer and the documents described in Section 1 hereof have
been executed by the Company, the Operating Partnership and the Buyer.
----------------
*[CONFIDENTIAL TREATMENT REQUESTED] Indicates material that has been omitted
and for which confidential treatment is being requested. All such omitted
material is being filed with The Securities and Exchange Commission pursuant
to Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
16
[Remainder of page intentionally left blank.
Signature page follows.]
17
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No.
1 to the Securities Purchase Agreement as of the date first above written.
THE XXXXX CORPORATION
By: /s/ XXXXX X. XxXXXXXX
-----------------------------------------
Name: XXXXX X. XxXXXXXX
---------------------------------------
Title: PRESIDENT AND CHIEF OPERATING OFFICER
--------------------------------------
THE XXXXX LIMITED PARTNERSHIP
By: THE XXXXX CORPORATION
Its: General Partner
By: /s/ XXXXX X. XxXXXXXX
-----------------------------------------
Name: XXXXX X. XxXXXXXX
---------------------------------------
Title: PRESIDENT AND CHIEF OPERATING OFFICER
--------------------------------------
iSTAR PREFERRED HOLDINGS LLC
By: /s/ XXX XXXXXXXX
-----------------------------------------
Name: XXX XXXXXXXX
---------------------------------------
Title: CHIEF EXECUTIVE OFFICER
--------------------------------------
18
